Oil trades higher as China opens borders

9 Jan 2023 , 10:16 AM

Oil prices rose slightly on Monday, a day after travelers flooded into China following the reopening of borders, lifting the fuel demand outlook and offsetting concerns about a global recession.

Hopes for less aggressive interest rate hikes in the United States are boosting financial markets while depressing the dollar. When the US dollar falls in value, dollar-denominated commodities become more affordable to investors holding other currencies.

Brent crude futures were up 53 cents, or 0.7%, to $79.10 per barrel by 0114 GMT, while West Texas Intermediate crude was up 46 cents, or 0.6%, to $74.23 per barrel.

Brent and WTI both fell more than 8% last week, marking their biggest weekly drops at the start of a year since 2016.

China, the world’s second-largest oil consumer, opened its borders for the first time in three years on Saturday, boosting the outlook for its transportation fuel demand.

Domestically, Beijing expects 2 billion trips during the Lunar New Year season, nearly doubling last year’s movement and returning to 70% of 2019 levels.

However, there are still concerns that the massive influx of tourists will cause another wave of infections, halting China’s economic recovery.

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