Bloomberg oil went up as investors bet on stronger Chinese demand and as a weaker dollar made commodities more attractive for many buyers.
West Texas Intermediate went up to $81 a barrel after the US earnings were rolled in on Wednesday. The number of deaths and severe cases of a virus in hospitals in China is now 70% less than peak levels in early January, authorities said late on Wednesday. That should set the stage for a recovery in mobility and fuel consumption in the biggest oil importer.
The US dollar's index fell to a nine month low on Wednesday, with the dollar falling to a nine-month low on Wednesday. The latest leg higher follows a drop in the year's first two sessions on concerns over a global slowdown. The rebound has been largely due to hopes that Chinese consumption will pick up after years of lock downs. Open interest in the global benchmark Brent has rebounded to the highest level since February last year, with a return to the crude futures market.
According to Charu Chanana, market strategist for Saxo Capital Markets Pte in Singapore, a weaker dollar and sustained, positive signals from China are reopening underpinned crude prices.
In less than two weeks, a European Union ban on Russian oil products will start at the same time as a Group of Seven-led price cap on fuels. Russia has been moving record amounts of its flagship Urals crude at sea as Moscow tries to beat the European sanctions on its crude flows amid the war in Ukraine.
The Energy Information Administration showed that the US's commercial crude inventories increased by half a million barrels last week. The increase was less than anticipated, but it followed a build of more than 27 million barrels over the past two weeks.
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