Both contracts rose more than 8% last week, the biggest weekly gains since October, after China abandoned what was left of its zero-COVID policy by reopening its borders on January 8.
Chinese crude oil imports rose 4% year-on-year in December, while an expected resurgence in travel for the Lunar New Year holiday at the end of the week raised the outlook for demand for transport fuels.
Traffic levels in China are picking up from record lows following the easing of COVID-19 restrictions, translating into higher demand for crude oil and oil products, ANZ analysts said in a note.
However, new reports over the weekend highlighting a rise in deaths from COVID-19 weighed on analysts’ sentiments.
“Although China’s prospects have turned around, it must be borne in mind that the normalization of its oil demand will be gradual (…) As things stand, China’s oil recovery continues to be more predicted than real” said Stephen Brennock, an analyst at PVM.
Meanwhile, the Organization of the Petroleum Exporting Countries and the International Energy Agency will publish their monthly reports this week, which are closely watched by investors for global supply and demand prospects.
Investors will also be looking for clues on the outlook at the World Economic Forum (WEF) in Davos, which opens on Monday, and will be watching this week’s Bank of Japan (BOJ) meeting to see if it will defend its massive stimulus policy. .
Source: Ambito
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