Oil prices open higher at the start of the week on optimistic demand outlook

West Texas Intermediate futures climbed to $75 a barrel on Monday after sliding 8% lower last week. According to an interview with the People’s Daily, a Chinese central bank official said the country’s growth will soon be back on track as Beijing provides more financial support to households and companies.

The Federal Reserve may lean toward lower interest rate hikes after slashing wage growth in December, another step in its aggressive campaign of monetary tightening. This put pressure on the US dollar and added to tailwinds for commodities priced in the currency.

“It will take some time to feel the impact of China’s reopening of borders,” said Sean Lim, an analyst at RHB Investment Bank Bhd in Kuala Lumpur. We expect a more balanced oil market in the medium term.”

Oil has got off to a weak start to 2023 as forward curves indicate ample supply and thin liquidity keeps futures from wild swings. However, bullish voices are rising with top hedge fund manager Pierre Andurand saying crude prices could exceed $140 a barrel this year if Asia were to fully reopen after Covid-related lockdowns. Is.

The Biden administration is delaying purchases to replenish emergency oil reserves after deciding that proposals it received were either too expensive or did not meet required specifications, according to people familiar with the matter.