Crude Oil prices have shown high volatility in 2012 with prices strongly responding to fundamental news from the Euro Zone and the United States. The latest scare to oil prices has now come in the form of China’s economic woes. Despite the financial turmoil during the 2008-2010 global recessions, China stayed true to its course, bounced back and posted strong growth. A latest poll by Reuters conducted on economists have however concluded that growth in 2012 between April and May are going to be the lowest in three years.

According to CNBC’s poll looking at Crude Oil market sentiments, bearish sentiments were in the majority and many set their target prices below $80 in the international market upon receiving data from China. Although domestic demand for Crude Oil looks strong, especially in China, factory orders for export goods remain weak. Since a considerable amount of China’s industrial sector is devoted to exports, the slump in factory orders have reduced overall Crude Oil consumption. Problems in the manufacturing sector have spilled into the economy and the Chinese central bank has had to act twice in a month by lowering their lending and deposit rates; the latest being on Thursday last week.

More data on China is scheduled to be released this week, so investors should expect volatility in the Crude Oil market. Other factors that might influence price this week include the oil workers strike in Norway, Hurricane season in the United States and of course, crisis in the Middle East. A senior Iran official has recently threatened to block the Strait of Hormuz if Iranian interests are under threat. If Iran takes this action, not only will they reduce Euro-Asia trade traffic, but might also spark militarily confrontation. While Crude Oil investors should keep a particular eye on China this week, do keep in mind that several bullish pressures might be developing elsewhere.

Note: The blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.