Oil headed for the highest close since early December on hopes that easing China’s severe Covid curbs will lead to a rebound in fuel consumption in the world’s largest oil importer, and ahead of the International Energy Agency’s latest outlook.
As of 16.35 hrs. (Thai time), Brent crude futures were up US$1.00, or 1.16%, at $86.92 a barrel, following a 1.7% rally in the previous session.
U.S. West Texas Intermediate (WTI) crude gained US$1.19, or 1.48%, to $81.37 a barrel.
China’s GDP rose by 3% in 2022, falling short of the official target of “about 5.5%” and marking the country’s second-worst performance since 1976. Despite this, the data outperformed experts’ expectations after China reversed its zero-Covid policy in December.
Later on Wednesday, the International Energy Agency (IEA) will release its monthly review. It could be a reflection of the rapid reopening of the Chinese market after the war in Ukraine and the anticipated effect of sanctions on Russian flows.
The price of crude oil had a rough start to the year, falling in the first week on worries of a worldwide recession and then surging in the weeks that followed. Oil has been buoyed by factors apart from China’s policy shift, such as a weaker dollar and the belief that the Federal Reserve will soon halt its aggressive interest-rate hikes.