Oil posts biggest weekly gain since October on China optimism, Dollar slump

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Oil posts biggest weekly gain since October on China optimism, Dollar slump

On Friday, both US WTI (West Texas Intermediate) alongside UK crude futures’ prices jumped as much as 1.5 per cent, as China reopening bolstered hopes of an increase in demands, while further weakening of the American currency had added to investors’ optimism.

In the matter of the fact, as China re-opening had shot up hopes that global oil demand might witness a maverick upswing in a near-term and an ease in US inflation had sent the Us Dollar Index (DXY) close to nine-months low, oil prices spurred up sharply over the week with both benchmarks gaining as much as 8.0 per cent.

In factuality, China is the world’s largest oil importer, while an entire obliviating of China’s zero-Covid policy would likely to ramp up factory activities while solidifying its status as the world’s largest oil importer.

Apart from that, following a flurry of dismal US business activity data coupled with the Thursday’s CPI data that showed a marginal ease in inflation indicators, had sent the American currency to a nearly nine-months low, eventually making crude oil cheaper for the buyers.

Oil jumps on China re-opening hope

Citing statistics, in the day’s commodity market wind-down, UK crude futures’ price closed down the session 1.5 per cent lower to $85.28 a barrel, while US WTI crude oil futures’ prices added 1.9 per cent to $79.86 per barrel.

Over the week, UK crude took a giant leapfrog of as much as 8.6 per cent, while US WTI crude oil futures’ prices gained 8.4 per cent, paring much of their previous week’s losses. Meanwhile, addressing to the impacts of China re-opening on global crude oil prices, a UBS analyst Giovanni Stanovo said, “Everyone is looking at Chinese mobility indicators and they point upward, indicating recovering oil demand and supporting prices.

Next thing to watch is if this translates also into higher Chinese crude imports and if energy agencies (IEA, Opec) revise upwards their (first quarter) demand estimates”.

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