Oil rose on Monday as the prospect of demand recovery, led by China’s loosening of COVID-19 curbs and the United States’ decision to buy back oil for its state reserves, gained the upper hand over global recession fears.
Brent crude futures gained 74 cents, or 0.9%, to $79.78 a barrel by 0458 GMT while U.S. West Texas Intermediate crude was at $75.03 a barrel, up 74 cents, or 1%. Both benchmarks plunged more than $2 a barrel last Friday, following hawkish remarks from U.S. and European central banks on interest rates hike that sparked worries of possible recession.
China, the world’s top crude oil importer and No. 2 oil consumer, is experiencing its first of three expected waves of COVID-19 cases after Beijing relaxed mobility restrictions.
“Despite a surge in COVID cases, the reopening optimism and accommodative policy improve oil’s demand outlook,” CMC Markets analyst Tina Teng said. China’s abrupt end to its ‘dynamic zero’ COVID policy is breathing new life into its ailing aviation sector, with average jet fuel demand jumping by 75%, or nearly 170,000 barrels per day, in two weeks, according to satellite data firm Kayrros.
