Crude oil prices edged up on Monday as the border reopened in China, world’s top crude importer, which lifted the fuel demand outlook and partly offset concerns of the global recession.
Brent crude futures rose 90 cents, or 1.2%, to $79.47 a barrel at 0520 GMT, while U.S. West Texas Intermediate crude was up 90 cents, or 1.2%, at $74.67.
Hopes for less aggressive US interest rate rises are depressing the dollar and buoying financial markets. Both WTI and Brent tumbled more than 8% last week, their biggest weekly declines at the start of a year since 2016.
“Crude oil prices recovered from the previous week’s losses as the economic reopening in China and less aggressive monetary tightening prospects from the Federal Reserve set a positive tone for demand recovery,” said Avtar Sandu, senior manager for commodities at Phillip Futures.
World’s second-biggest oil consumer, China, opened its borders for the first time in three years on Saturday, buoying the outlook for its demand for transportation fuels. Domestically, some 2 billion trips are expected during the Lunar New Year season, nearly double last year’s movement and recovering to 70% of 2019 levels, Beijing says.
Airlines over the last week have boosted their January international seat capacity to and from China by 9.5% after the country’s border opening, according to reports.
However, there is still the concern that the massive movement of Chinese travelers may cause another surgical strike of Covid 19.
Energy futures for refined products, crude oil, and natural gas have plummeted in the New Year as traders have reconsidered near-term worries over cold weather and fears of supply shortages and dumped contracts.
U.S. energy firms last week cut the number of operating oil and natural gas rigs by seven, the biggest weekly decline since September 2021, energy services firm Baker Hughes Co said on Friday.
