Oil steadied after five days of gains ahead of key US inflation data as China’s crude buying ramps up before the Lunar New Year holidays.
(Bloomberg) — Oil steadied after five days of gains ahead of key US inflation data as China’s crude buying ramps up before the Lunar New Year holidays.
West Texas Intermediate traded near $77 a barrel after closing 3.1% higher in the previous session. Investors are keenly watching the consumer price index read due later Thursday, which will provide clues on the path forward for monetary tightening in the world’s biggest economy.
China’s crude buying after Beijing issued a bumper batch of import quota added some bullish optimism to the demand outlook. Consumption in the top importer is set to rebound following the end of the nation’s Covid Zero policy.
There’s “increasing optimism surrounding Chinese demand,” said James Whistler, managing director of Vanir Global Markets Pte in Singapore. “The physical markets are being lifted actively by Chinese buyers.”
Oil’s recent push higher gathered steam after a rocky start to the year amid fears over a global economic slowdown. Investors looked beyond the biggest jump in US crude stockpiles since February 2021, which was largely anticipated after a cold snap that idled much of the US Gulf Coast’s refining capacity.
Brent could reach $110 a barrel by the third quarter if China and other Asian economies fully reopen after Covid restrictions, according to Goldman Sachs Group Inc.’s Head of Commodities Research Jeff Currie. Top hedge fund manager Pierre Andurand said last week that oil may exceed $140 this year.
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