Oil builds on Monday morning after China announced measures to support its weakening economy. However, investors are still concerned about China’s growth and the possibility of further US interest rate hikes that could weaken oil demand.

A barrel of European reference crude, Brent, costs USD 84.71 on Monday morning, compared to USD 84.31 on Friday afternoon. At the same time, US West Texas Intermediate oil trades at USD 80.12 compared to USD 79.85 on Friday afternoon.

Brent and WTI ended a second consecutive week of declining prices on Friday after US Federal Reserve Chairman Jerome Powell’s speech at the annual symposium in Jackson Hole, Wyoming, indicated that it may be necessary for the Federal Reserve to increase interest rates further to curb inflation, which is still too high.

However, oil on Monday morning benefited from slightly better sentiment on the economic outlook after China halved the stamp duty on stock trades with effect from Monday, in the country’s latest attempt to boost markets. However, Tony Sycamore, a market analyst at IG, does not believe the move is quite enough to seriously change investors’ negative view of China, according to Reuters.

Oil is still buoyed by falling oil inventories and production cuts from the Organization of the Petroleum Exporting Countries and its allies, OPEC+. However, the propstect of easing sanctions on Iran and Venezuela is beginning to change the outlook of tightening supply, according to ANZ Research in a note, Reuters reports.

(Translated using DeepL with additional editing by Simon Øst Vejbæk)