Oil prices edge up following Chinese border opening

China has relaxed its extensive Covid-19 restrictions and reopened its borders, sending oil prices up.
Photo: Jacob Ehrbahn
Photo: Jacob Ehrbahn

Oil prices are on the rise Monday morning in the wake of China’s border reopening Sunday, which follows three years of tough Covid-19 restrictions for travelers.

The reopening enhances the outlook for transport fuels, reports Reuters.

Despite Monday’s rally, the prices have not yet recovered from last week’s decline, still remaining slightly below the Friday evening’s levels.

A barrel of US reference crude West Texas Intermediate, to be delivered in February, trades for USD 74.66 Monday morning against USD 74.95 Friday afternoon. Meanwhile, European counterpart Brent with delivery in March goes for USD 79.45 per barrel against USD 79.45 at close on Friday.

Both Brent and WTI took a 8% tumble last week, the biggest weekly decline in the beginning of a year since 2016, Reuters notes. 

”Crude oil futures had their biggest weekly losses in a month due to recession fears as oil prices have been positively correlated with inflation since 2022, though China’s reopening may buffer the decline in the near term,” says CMC Markets analyst Tina Teng in a note.

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