Oil rose after a weekly loss on hopes that a Chinese demand rebound is picking up pace following the end of the Asian nation’s Covid Zero policy, outweighing hawkish signals from the Federal Reserve.
(Bloomberg) — Oil rose after a weekly loss on hopes that a Chinese demand rebound is picking up pace following the end of the Asian nation’s Covid Zero policy, outweighing hawkish signals from the Federal Reserve.
Brent climbed above $84 a barrel, while US futures snapped the longest run of daily declines this year. Signs are emerging of a recovery in Chinese oil demand, though the prospect of further monetary tightening from the Fed to combat inflation is keeping a lid on crude prices. Trading may be thin due to a US holiday.
See also: Russian Oil Exports Surge With Days to Go Until Cuts Begin
Oil has endured a bumpy start to 2023 as investors juggle persistent concerns over a global economic slowdown and optimism around China’s reopening. The fallout from sanctions on Russian energy and the rerouting of global flows has added another element of uncertainty to the global market, with exports climbing again last week.
“We still expect the market to eventually turn its attention to an expected tighter market balance in the second half and the Chinese reopening,” said Arne Lohmann Rasmussen, head of research at A/S Global Risk Management Ltd. “More robust data currently fuel expectations that the Fed will have to hike rates to a higher level and keep them there for an extended period.”
The US plans to impose new export controls and fresh sanctions on Russia, targeting key industries a year after the invasion of Ukraine. The measures will target the nation’s defense and energy sectors, financial institutions and several individuals, according to people familiar with the matter.
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