Oil prices rise at the beginning of trading
2023.01.09 01:58
Oil prices rise at the beginning of trading
Budrigannews.com – Oil prices increased on Monday as China’s borders, the world’s largest crude importer, reopened, improving the outlook for fuel demand growth and easing concerns about a global recession.
At 0520 GMT, futures were up 90 cents, or 1.2 percent, to $79.47 a barrel, and US West Texas Intermediate crude was up 90 cents, or 1.2 percent, to $74.67.
The dollar is falling as financial markets are buoyed by expectations of less aggressive U.S. interest rate increases. For investors who hold other currencies, dollar-denominated commodities become more affordable due to a weaker greenback.
Last week, Brent and WTI experienced their largest weekly declines since 2016 at the beginning of the year, falling more than 8%.
According to Avtar Sandu, senior manager for commodities at Phillip Futures, “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.”
China opened its borders for the first time in three years over the weekend as part of a “new phase” in the fight against COVID-19. According to Beijing, domestically, approximately 2 billion trips are anticipated during the Lunar New Year season, nearly double the movement of the previous year and recovering to 70% of 2019 levels.
According to Cirium, an aviation data provider, airlines have increased their January international seat capacity to and from China by 9.5% in response to the country’s border opening.
Even though oil gained on Monday, there are still worries that the large number of Chinese tourists could increase the number of COVID infections.
The structure of the benchmark oil futures market reflects these worries. When current prices are lower than prices for later-delivery contracts, which typically indicates bearish sentiment for the market, the front-month Brent and WTI contracts are in contango.
“As China’s fight against COVID-19 gets worse, market sentiment has remained negative. “A surge in cases across the country could stifle economic activity, despite the removal of most restrictions related to the virus,” ANZ analysts wrote in a note.
In the new year, refined goods and energy futures fell as traders reconsidered near-term concerns about cold weather, supply shortages, and dumped contracts.
According to Baker Hughes Co., an energy services company, the number of oil and natural gas rigs in operation in the United States decreased by seven the previous week, marking the largest weekly decrease since September 2021.
More Applications for replenishment of oil reserves in U. S. were rejected
