Oil rose at the week’s opening as China abandoned its Zero-Covid policy.
U.S. crude rose above $75 a barrel after losing almost 4 percent in the last two sessions of last week.
President Xi Jinping said restoring and increasing consumption for 2023 should “take priority.” This commitment can help support energy demand, even as cases of Covid rise and the reopening process has its ups and downs.
U.S. officials are taking action to replenish the Strategic Petroleum Reserve with a fixed-price purchase of 3 million barrels, the Department of Energy said on Friday. The announcement was made to help reduce local energy costs, which were skyrocketing after President Joe Biden’s Russian invasion of Ukraine.
Oil is heading for its second monthly loss as recession concerns in the U.S. and Europe escalate and central banks continue to tighten monetary policy. In addition, Russian flows have proven resilient so far, as a price cap imposed by the G7 and the European Union has not caused significant disruptions.
Charu Chanana, Market Strategist at Saxo Capital Markets in Singapore, said China’s “effort to expand consumption as a key economic priority for 2023 has helped paint a better outlook for oil demand, and news of the Strategic Petroleum Reserve refills also contributed.”
