Oil prices rebound on China demand despite global fears

April 25, 2023 (MLN): Oil prices were steady on Tuesday as holiday travel in China is likely to boost fuel demand, despite concern over rising interest rates, and global economic concerns.

Brent crude is currently trading at $82.46 per barrel, up 0.13% on the day, while West Texas Intermediate crude (WTI) trading at $78.69 per barrel, up 0.06%.

Both benchmarks tumbled more than 5% last week.

Oil prices started this week by gaining around 1% on Monday on optimism that holiday travel in China would increase fuel demand.

According to Leon Li, an analyst at CMC Markets, the recovery in oil prices this week was attributed to investors expressing optimism that holiday travel in China would increase fuel demand, coupled with expectations for a slowdown in U.S. gross domestic product (GDP) growth in the first quarter, that likely caused the pullback in the U.S. dollar index on Monday, Reuters reported on these developments.

Despite expectations from analysts and traders for strong Chinese fuel demand in the latter half of 2023 and supply constraints due to the OPEC+ producer group’s planned supply cuts starting from May, economic concerns have taken precedence.

Markets are also eyeing U.S. government data on inventories, which is due on Wednesday.

The outlook for fuel demand and global economic growth continue to weigh on the market, with investors remaining cautious amid ongoing uncertainty.

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