Around 11:45 a.m., Brent rose 1.09% to $80.86 and WTI advanced 0.94% to $76.95.
Oil prices continued to rise on Wednesday, driven by China’s economic recovery, which remains uncertain, however, as the country faces a wave of infections linked to its reopening.
Around 10:45 a.m. GMT (11:45 a.m. CET), a barrel of Brent from the North Sea for delivery in February gained 1.09%, to 80.86 dollars.
Its American equivalent, the barrel of West Texas Intermediate (WTI), for delivery the same month, of which it is the first day of use as a reference contract, took 0.94%, to 76.95 dollars.
“Optimism” is returning to oil investors, “mainly due to China’s revision of its zero-Covid policy”, comments Stephen Innes, analyst at SPI.
China is the world’s largest importer of crude.
“Although it is not said, it is understood that the political decision-makers have decided to accept a significant wave of Covid”, continues the analyst.
Crude’s gains are, however, limited by the rise in infections since the easing of Chinese health policy.
This is enough to fuel “the unease about the country’s economic recovery and the outlook for fuel demand”, continues Stephen Brennock, analyst at PVM Energy.
On Tuesday, the World Bank significantly lowered its growth forecast for China this year and in 2023, due to “significant risks” linked mainly to Covid-19 and the real estate crisis.
For investors, “the trickiest part is trying to determine the speed and continuation of the reopening (of the country) in expectation of multiple waves of Covid,” adds Mr Innes.
The Gross Domestic Product (GDP) should thus progress this year by only 2.7% then by 4.3% next year according to the World Bank, a sharp decline compared to the institution’s previous forecasts (+4.3 % in 2022 and +5.2% in 2023).
The market is also awaiting the publication on Wednesday of the state of American oil inventories by the American Energy Information Agency (EIA).
Analysts expect a 2.5 million barrel increase in commercial crude reserves and 2 million barrels for gasoline, according to the median of a consensus compiled by Bloomberg.