Oil futures rose Monday, finding support as investors assessed the longer-term outlook for Chinese demand as the country relaxes its COVID-19 curbs.Price action
West Texas Intermediate crude for January delivery
rose 40 cents, or 0.5%, to $74.69 a barrel on the New York Mercantile Exchange.
February Brent crude
the global benchmark, was up 52 cents, or 0.7%, at $79.56 a barrel on ICE Futures Europe.
Back on Nymex, January gasoline
rose 0.5% to $2.143 a gallon, while January heating oil
gained 1.3% to $3.161 a gallon.
January natural-gas futures
dropped 5.7% to $6.227 per million British thermal units.
Market drivers Crude rose last week, but fell significantly on Friday after rate rises by major central banks and indications that rates will remain elevated in 2023 stoked fears of a global economic downturn, analysts said.
“There is no doubt that demand is being adversely influenced, and this is mainly because traders do not like the fact that central banks are dealing with their monetary policy. However, not everything is so negative as China has vowed to fight all pessimism about its economy, and it will do what it takes to boost economic growth,” said Naeem Aslam, chief market analyst at Ava Trade, in a note. China’s strict COVID policies have undercut demand for crude from one of the world’s largest energy-consuming countries. The relaxation of COVID restrictions is seen as a long-term positive, but a wave of infections has sparked concerns about the near-term outlook. “Going forward, it seems more likely that we will see further support from the PBOC (People’s Bank of China) to support economic growth in China, and Beijing is likely to ease off all the policies around COVID,” he wrote, bringing more stability to oil prices, Aslam said in a note.