Oil prices reduced their decline in limited trading at the beginning of the week

Oil prices reduced their decline in limited trading at the beginning of the week
Oil prices reduced their decline in limited trading at the beginning of the week
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Oil prices fell today, Monday, in limited trading due to the Lunar New Year holiday in East Asia, but they maintained most of the gains they made last week on the back of the possibility of an economic recovery in China, the largest oil importer, this year.

Brent crude futures fell 11 cents, or 0.13%, to $87.52 at 06:13 GMT, while US West Texas Intermediate crude futures fell 9 cents, down 0.11%, to $81.55 a barrel.

Last week, Brent rose 2.8%, while US crude rose 1.8%.

ANZ commodity analysts said in a note that the data shows a strong recovery in travel in China after the easing of “Covid-19” restrictions.

They pointed to a 22 percent increase in road traffic so far this month compared to the previous year in 15 major cities in the country.

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The head of the International Energy Agency, Fatih Birol, said on Friday that energy markets could be undersupplied this year if the Chinese economy rebounds in the way financial institutions expect it to.

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The jump in traffic in China ahead of the Lunar New Year holiday sends a message of optimism to fuel demand after the two-week holiday.

Analysts (ANZ) said, “The expected increase in demand comes as the market prepares for more sanctions on Russian oil.”

The EU-G7 alliance will set a cap on Russian refined product prices from February 5, in addition to the alliance’s cap on Russian crude oil prices since December and the EU’s ban on Russian crude imports by sea.

The Group of Seven agreed to postpone the review of the level of the Russian oil price ceiling to March, a month after the originally scheduled date, to give an opportunity to assess the consequences of imposing a ceiling on the prices of oil products.

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