The rally, which was effective with the reopening of China in oil, was interrupted on the first trading day of the new week.
Oil performed negatively for the first time in 7 trading days as China reopened, revealing a mixed outlook for worldwide demand.
After rallying more than 8 percent last week, US crude oil tested below $80 on the first trading day of the new week. Brent oil also saw below $85.
China lifted its Covid-19 restrictions in late 2022 after years of strict limits.
Analysts predict oil demand at the largest crude oil importer will likely break records.
In addition to China’s rapid turnaround, recent support for crude oil prices has come from rising expectations that the Fed’s aggressive rate hikes are ending and a weakening dollar. Investors are also watching the impact of sanctions on Russian oil and product flows.
“While China was the main driver of commodities last week, investor sentiment has also increased with the expectation that the Fed will slow rate hikes,” said James Whistler, Managing Director of Vanir Global Markets.
This week, investors will take a closer look at valuations from the Organization of the Petroleum Exporting Countries and the International Energy Agency, which could draw attention to consumption risks from slowing growth in the US and Europe.