Oil Prices Rise After China Eases Its Covid Restrictions

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Oil Prices Rise After China Eases Its Covid Restrictions

Oil Prices Rise After China Eases Its COVID Restrictions

During Thursday's trading session, the price of an oil barrel increased b $2 on the backdrop of positive news from China. According to confirmed reports, China has eased its tough COVID policies in 2 cities. Meanwhile, the US Dollar is also on the back foot after the recent Fed comments related to interest rate hikes. Overall, the sentiment surrounding oil prices was boosted by the fundamental data.

But the biggest catalyst is most definitely the shift of China's policy related to zero COVID. Now that China has decided to open up its two major cities, it will also mean an increase in the oil demand. The cities which will benefit from the ease of COVID restrictions are Chongqing and Guangzhou.

At the time of writing this, the price of Brent crude increased by 2% or around $1.74. Similarly, the US WTI increased by $2.20 (2.7%) and touched the level of $82.75.

Experts believe that the news from China will continue to impact the oil markets. Going forward, oil prices could jump even further if more Chinese cities ease their zero COVID policies.

Currently, the 2nd largest oil consumer in the world is the Chinese economy - So it is only acceptable to assume that it will have such a huge impact on oil prices.

Another factor that is supporting the crude oil prices is the output cut announced by OPEC+. In Addition, the next meeting of the group is scheduled to be on 4 December 2022, which will be highly sought after by the investors.

Looking ahead, there are talks of a potential price cap placed on Russian oil. If this happens, it will make it difficult for Russia to sell its oil at a good profit percentage. But it will still be too soon to say anything, as this is still a developing story, and discussions are still going on.

But for now, China continues to be a major influence on the oil market and could further boost the price per barrel!

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