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Oil Prices See Modest Gains On China Demand Hopes

Oil prices traded higher on Monday in thin trade, with many markets in eastern Asian countries closed for the Lunar New Year holiday.

Benchmark Brent crude futures rose 0.3 percent to $87.89 a barrel, while WTI crude futures were up 0.3 percent at $81.85.

Investor confidence has surged on hopes around China's demand recovery after the recent easing of travel restrictions.

Chinese oil demand rose by nearly 1 million barrels per day (bpd) sequentially to 15.41 million bpd in November, the highest level since February, according to recent data from the Joint Organizations Data Initiative.

China is the second largest importer of crude oil in the world. Executive director of International Energy Agency (IEA), Fatih Birol, had said last week that energy markets could be tighter in 2023, especially if the Chinese economy recovers and the Russian oil industry struggles under sanctions.

Both OPEC and IEA mentioned Chinese demand recovery as the driving force behind oil consumption in 2023.

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