Oil prices remain high on optimism about China’s return to normalcy following the Covid-19 pandemic despite lower trading due to the Chinese New Year, among other things.

A barrel of European benchmark crude Brent trades for USD 87.47 Monday morning against USD 86.21 Friday afternoon. Meanwhile, US reference West Texas Intermediate sells for USD 81.53 per barrel against USD 80.58 Friday afternoon.

Oil prices jumped Friday evening, with Brent trading at USD 87.79, before decreasing subsequently early Monday on account of the Chinese New Year. Most of last week’s gains remain on the basis of projections for China’s economic recovery. Brent increased by 2.8% last week, reports Reuters. 

Busier traffic ahead of the holiday celebrations also bolsters expectations for higher fuel demand in China once the two-week vacation period is over.

”The expected surge in demand comes as the market braces for further sanctions on Russian oil,” tells ANZ analyst, according to Reuters. 

New sanctions against Russia is set to take effect on Feb. 5, on account of which G7 nations have postponed their assessment of the cap on Russian oil until March.