Oil up over surging demand in China and weakening US dollar

Oil prices rose on Tuesday over a weaker US dollar and expectations of greater demand in China, the world’s largest oil importing country.

International benchmark Brent crude traded at $86.28 per barrel at 09.56 a.m. local time (0656 GMT), up 0.11% from the closing price of $86.18 a barrel in the previous trading session.

At the same time, American benchmark West Texas Intermediate (WTI) traded at $80.55 per barrel, a 0.11% increase after the previous session closed at $80.46 a barrel.

Despite China’s pessimistic economic growth forecast for 2023, rising oil prices were supported by renewed optimism about stronger demand.

According to Chinese Prime Minister Li Keqiang, China will only grow 5% in 2023, a modest increase from 3% last year and less than half the 8.1% rate from the previous year.

In an e-mailed note, Australia and New Zealand Banking Group commodity strategist Daniel Hynes said although the modest growth target from China disappointed traders, ‘the strong recovery in crude oil demand is likely to continue unabated.’

Aramco President and CEO Amin Nasser also echoed this oil demand recovery.

‘The demand from China is very strong,’ Nasser said in an interview in Riyadh last week.

Dollar-indexed oil prices were also supported by the decreasing value of the greenback.

The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, declined 0.10% to 104.22 early Tuesday.

• American Benchmark West Texas Intermediate (WTI)