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Oil prices rebound as US economy shows signs of strength

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Oil prices have rebounded slightly following a three-week slump that saw prices dip for the first time since November. Brent crude futures rose 0.2% to $75.41 per barrel while US West Texas Intermediate (WTI) crude futures rose 0.2% to $71.46. The slump was initially triggered by fears of a recession in the US, which led to a selloff in energy stocks on Wall Street.

However, a healthy US jobs report for April and the weaker dollar helped to ease concerns. The next meeting of the Organization of the Petroleum Exporting Countries and allies (OPEC+), scheduled for June, is also expected to result in supply cuts that may help stabilise the market.

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Goldman Sachs has maintained its forecast for Brent crude, predicting a price of $95 per barrel by December and $100 by April. Analysts at ANZ Research believe that the market focus will now shift away from economic concerns to tightening oil supply.

Investors will be closely watching Chinese economic indicators this week, including trade, inflation, lending, and money supply figures for April, as China is the second largest oil consumer in the world. This information will help market participants to gauge economic recovery in the country.

For the most part, traders are cautiously optimistic about the future of the oil market. While concerns over near-term demand persist, analysts believe that these concerns are overblown. The focus is now shifting towards supply cuts and the potential impact of these cuts on the market.

In summary, while oil prices experienced a brief slump, the market has rebounded and traders remain cautiously optimistic about the future. As the focus shifts towards supply cuts and tightening oil supply, market participants will be closely watching economic indicators in China and the US to gauge the health of the global economy.

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