Monitoring Desk
ANKARA: Oil prices rose on expectations of a surge in demand from China, the world’s second-largest oil consumer, on Thursday as the country ended its zero-COVID policy in an effort to revive the economy.
International benchmark Brent crude was trading at $85.20 per barrel, up 0.13% from the previous trading session’s close of $85.09 per barrel at 9.40 a.m. local time (0640 GMT). At the same time, the American benchmark West Texas Intermediate (WTI) was trading at $78.53 per barrel, up 0.08% from the previous session’s close of $78.47. Oil prices rose as a result of expectations of a recovery in Chinese demand. Fitch, an international credit rating agency, raised its forecast for China’s economy this year from 4.1% to 5%.
According to Fitch, the upward revision reflects the country’s faster-than-expected recovery in consumption and economic activity since Chinese authorities abandoned their zero-COVID policy. Since the beginning of the COVID pandemic, long-term lockdowns and strict restrictions in China have stifled the country’s economic growth.
World’s largest oil importer
Experts predict that the world’s largest oil importer will see an economic rebound as travel restrictions are lifted and life returns to normal. Consumption is expected to rise as travel increases, which will boost economic activity. In December, China lifted COVID restrictions, allowing for travel in January.
Meanwhile, a larger-than-expected increase in US crude inventories indicated a drop in oil demand, limiting price increases. According to data released late Wednesday by the Energy Information Administration (EIA), commercial crude oil inventories in the United States increased by 0.5% during the week ending February 3. Inventories increased by approximately 2.4 million barrels to 455.1 million barrels, exceeding the market’s expectation of an increase of approximately 2.2 million barrels.
