Investing.com – After a bearish start in early trading today coinciding with the Chinese market holiday, oil prices turned bearish to record a sudden rally as optimism about improving Chinese demand fell.
Oil prices fell during early trading on Monday, as investors assessed the outlook for demand as China’s economy restarts, and risks related to Russia’s production this year.
After descending near the levels of $81, US Nymkas light crude rose during these moments, within the range of 0.6%, to levels above $82 per barrel, with gains of $0.6 per barrel.
And my record increased during these moments of Monday’s trading above $88 a barrel after trading below $87 levels earlier in the session, to now reach $88.16, an increase of 0.7%, or the equivalent of $0.7 per barrel.
Oil prices ended their trading, on Friday, with an increase of more than 1.5%, so that oil rose for the second week in a row.
The benchmark Brent crude and the US West Texas crude achieved weekly gains of about 2.7% and 1.8%, respectively, during the past week.
Analysts predicted that optimism about the reopening of China is likely to push the price of a barrel of oil globally to rise near levels of $100 a barrel.--
Mumbai-based director of energy consultancy Trifecta, Sukrit Vijikar, said the market wanted to hold long positions in case Chinese growth resumed.-
Commodities analysts at ANZ said in a note that the data shows a strong recovery in travel in China after the easing of coronavirus restrictions, pointing to a 22% jump in road traffic congestion so far this month compared to the year before.
The head of the International Energy Agency, Fatih Birol, said on Friday that energy markets could tighten this year if the Chinese economy recovers in the way financial institutions expect it to.
US Treasury Secretary Janet Yellen expressed confidence in the possibility of expanding restrictions on Russian sales to include refined petroleum products, while acknowledging that the task would be more complicated.
ANZ analysts said: “The expected increase in demand comes as the market prepares for further sanctions on Russian oil.”
The EU-G7 alliance will set a price cap for Russian refined products starting February 5, in addition to the Russian crude price cap in place since December, and the EU’s ban on Russian crude imports by sea.
The G-7 agreed to postpone the review of the Russian oil price cap to March, a month later than originally planned, to give time to assess the impact of the ceiling on oil products.