In early trade on Monday, oil prices slid lower due to the Lunar New Year holiday in east Asia, but they maintained most of last week’s gains on optimism that the world’s largest oil importer, China, will see its economy improve this year.
Brent crude futures fell by 44 cents, or 0.50%, to $87.19 at 10.35 AM (Thai time), while U.S. West Texas Intermediate (WTI) crude futures fell 36 cents, also down 0.44%, to $81.28 a barrel.
Brent increased by 2.8% last week, while the US benchmark increased by 1.8%.
Commodity analysts at ANZ wrote in a note that data showed a substantial uptick in travel in China after COVID-19 restrictions were loosened, citing a 22% hike in road traffic congestion so far this month compared to a year earlier in the country’s 15 major cities.
If the Chinese economy recovers as expected, International Energy Agency head Fatih Birol said Friday, energy markets could tighten this year.
In an interview with Reuters, Birol said, “I wouldn’t be too relaxed about the markets, and 2023 may well be a year where we see tighter markets than some colleagues may think.”
Fuel demand should rebound strongly after China’s two-week Lunar New Year break, since traffic spiked in the lead-up to the celebration.
