Oil prices rose on Monday after reversing morning losses as investors became more optimistic that markets holiday travel in china rise to demand in the world’s largest crude oil importer.
Brent crude closed up $1.07, or 1.3%, at $82.73 a barrel, while US West Texas Intermediate crude rose 89 cents, or 1.1%, to $78.76.
Both contracts fell more than 5% last week, posting their first weekly declines in five years, as implicit demand for gasoline in the United States fell from a year earlier.
China’s difficult economic recovery after the Covid-19 pandemic has clouded the outlook for oil demand, although the country’s customs data released on Friday showed record import volumes in March.
Bookings in China for overseas travel for the upcoming May Day holiday point to a recovery in travel to Asian countries, but the numbers are still far from pre-Covid-19 levels, with long-haul airfares on the rise and not enough flights available.
“There is a lot of optimism surrounding the Chinese holidays when it comes to jet fuel demand, following the first genuine numbers on Chinese demand building,” said Bob Yawger, head of energy futures at Mizuho.
A supply adjustment due to the additional production cuts announced by the OPEC+ block from May could also raise prices.
“Planned production cuts by the OPEC+ alliance and a strong demand outlook from China could boost prices in the coming days,” independent analyst Sugandha Sachdeva said.
Oil exports from northern Iraq also showed little concrete sign of a rebound after a month of stagnation as aspects of a deal between Baghdad and the Kurdistan Regional Government (KRG) have yet to be worked out, according to four sources. .
