Crude oil dips, but hovers near 2023 highs on China demand optimism

Oil prices dipped in early Asian trade on Monday, but held close to the highest levels since the start of the year on optimism that China’s reopening will lift fuel demand at

the world’s top crude importer. Brent crude fell 36 cents, or 0.4%, to $84.92 a barrel by 0116 GMT while U.S. West Texas Intermediate crude was at $79.65 a barrel, down 21 cents,

or 0.3%, amid thin trade during a U.S. public holiday. Both contracts rose more than 8% last week, the biggest weekly gain since October, after China’s crude imports

rose 4% year-on-year in December while Lunar New Year travel brightens the outlook for transportation fuels. Traffic levels in China are continuing to rebound from record low

levels following the easing of COVID-19 restrictions, resulting in stronger demand for crude and oil products, ANZ analysts said in a note. Also ReadCrude oil price likely

to test $100/bbl in 2023; go long around Rs 6250/bbl with upside target of Rs 6500/bbl The rebound in domestic demand is expected to lead to a 40% drop in China’s exports of

refined oil products in January from December’s figure, led by gasoline, trading sources and analysts said. “While there is still plenty of optimism around Chinese demand, in the

near term the oil market remains relatively well supplied,” ING analysts said in a note. Also ReadMassive oil sector investment coming to India; Chevron, Exxon, Total,

others keen to invest this much money “We see further upside from 2Q23, as the market tightens. “This week, the Organization of the Petroleum Exporting Countries and the

International Energy Agency will release their monthly reports, closely watched by investors for global demand and supply outlooks.