Crude Oil Moves Sharply Higher Amid Optimism About Chinese Stimulus

(RTTNews) - The price of crude oil moved sharply higher over the course of the trading day on Tuesday, more than offsetting the steep drop seen in the previous session.

After tumbling $0.96 to $79.74 a barrel on Monday, crude for May delivery surged $1.79 to $81.53 a barrel, reaching its best closing level in over two months.

The rebound by the price of crude oil partly reflected optimism about additional Chinese economic stimulus as traders reacted to soft inflation data from China.

China's consumer inflation hit an 18-month low in March and producer price deflation deepened further, creating room for the central bank to potentially ease its monetary policy.

"The oil market is going to remain tight and while China's reopening has underwhelmed, they will do a lot better going forward and that should keep prices supported," said Edward Moya, senior market analyst at OANDA.

He added, "WTI crude is starting to make a move higher and if after tomorrow's inflation report prices continue to rise, the $85 level might not provide much resistance."

Crude oil was also supported by a pullback by the value of the U.S. dollar, with the U.S. dollar index falling by 0.4 percent.