- Oil extends gains amid optimism over China’s demand
- Mar ’23 WTI gains more than $1 this morning to trade above $81/Bbl
- Chinese authorities said that the number of virus-related deaths and severe cases in hospitals is currently 70% lower compared to peak levels in early January (BBG)
- This could lead to the further relaxation of COVID restrictions and increase the nation's mobility and fuel consumption
- Additionally, the US dollar fell to its lowest since April ‘22, supporting crude prices
- A weaker dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay more for the same amount of goods
- The Chinese Center for Disease Control and Prevention reports that Covid-related deaths and cases have dropped by over 70% from high levels in early January (BBG)
- Daily deaths fell to 896 on Monday compared to nearly 4,000 on January 4; severe cases were reported at 36,000 on Monday compared to 128,000 on January 5
- Chinese oil consumption is expected to hit a record this year as the world’s biggest crude importer abandons its Covid-zero policy
- Daily demand — which contracted last year — is expected to climb by 0.6-0.8 MMBbl/d in 2023