Oil rises on signs China’s Covid reopening will boost demand

Oil rallied as China eased Covid restrictions in Beijing, raising expectations of demand recovery at the world’s largest crude oil importer.

est Texas Intermediate inched towards $83 a barrel and rose for a fourth straight session yesterday. Beijing will allow some virus-infected people to self-isolate at home, a significant departure from its Covid-zero policy that raised concerns about economic growth. The move comes after pressure and public protests against the country’s tough policies.

Meanwhile, the dollar fell after a key US consumer price indicator rose less than forecast. The data bolstered Crude Oil’s rally as traders see a slower pace of inflation paving the way for more modest Federal Reserve rate hikes.

Crude oil is heading for a weekly gain as demand prospects brighten, despite hitting its lowest level since late 2021 on Monday. The recent shift in the market sets the backdrop for a virtual meeting of the Organization of Petroleum Exporting Countries and its allies on Sunday. Meanwhile, traders are awaiting news of a plan to cap the price of Russian crude, which could be fixed at $60 a barrel.

“Crude oil is benefiting from tailwinds from a reversal in sentiment on China’s Covid policy, the weaker dollar and the rally in risk assets,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “Raw volatility remains exceptionally high as we head into the weekend of uncertainty; It’s been a roller coaster ride of a week – and the ride isn’t over yet.”

The European Union is studying a mechanism that would allow regular changes and revisions to the price cap for Russian crude oil, people familiar with the matter said. The block races to agree on the measure.

https://www.independent.ie/business/world/oil-rises-on-signs-chinas-covid-reopening-will-give-boost-to-demand-42189535.html Oil rises on signs China’s Covid reopening will boost demand

Fry Electronics Team

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