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Oil prices rose yesterday, extending the previous session’s gains, driven by optimism that a relaxation of China’s strict Covid-19 curbs will lead to a recovery in fuel demand in the world’s top oil importer.
Brent crude futures were up US52 cents, or 0,6 percent, at US$86,44 a barrel, following a 1,7 percent rally in the previous session.
US West Texas Intermediate (WTI) crude CLc1 futures gained 55 cents, or 0,7 percent, to US$80,73 a barrel, having risen 0,4 percent on Tuesday.
China’s gross domestic product expanded 3 percent in 2022, missing the official target of “around 5,5 percent” and marking its second-worst performance since 1976. But the data still beat analysts’ forecasts after China rolled back its zero-Covid-19 policy in December.
The Organisation of the Petroleum Exporting Countries (OPEC) said in a monthly report Chinese oil demand would grow 510 000 barrels per day (bpd) this year after posting in 2022 its first contraction for years due to Covid-19 containment measures.
But OPEC kept its 2023 global demand growth forecast unchanged at 2,22 million bpd.
“Growing hopes that China’s fuel demand will pick up after a recent shift in its Covid-19 policy lent support to oil prices,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.
“OPEC’s optimistic outlook on China’s demand also supported the market sentiment,” he said, predicting a bullish tone for this week.
At the World Economic Forum in Davos, China’s Vice-Premier Liu He on Tuesday welcomed foreign investment and declared his country open to the world after three years of COVID isolation.
Oil was also boosted by a weaker US dollar, which steadied on Wednesday. — CNBC.
Online Reporter
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