Oil rises 1.6%, close to 2-week peak on hopes of demand in China

(Updated quotes, comments)

LONDON, Jan 17 (Reuters) –

Oil prices touched a two-week high on Tuesday after the Chinese economy posted its slowest growth rate in nearly half a century in 2022, but a reversal in the COVID-19 strategy has bolstered hopes of a recovery in fuel demand this year.

Futures for Brent crude rose by 15:53 ​​Moscow time by 1.59% to $85.8 per barrel, WTI rose by 0.71% to $80.43 per barrel.

The annual growth of the Chinese economy in 2022 amounted to 3.0%, which is far behind the official goal of the authorities of “about 5.5”. Leaving aside weak data since the first wave of coronavirus in 2020, this is the worst performance since 1976.

From October to December, China’s GDP rose 2.9% year-on-year, slower than the 3.9% rise in the third quarter. However, the pace exceeded the second quarter, when growth was a minimum of 0.4%, as well as market expectations – analysts polled by Reuters had forecast a 1.8% increase in GDP.

Data on Tuesday also showed that output from China’s refineries in 2022 fell 3.4% year-on-year, for the first time since 2001.

China’s appetite for oil is expected to boost demand by 500,000 bpd after Beijing lifted coronavirus restrictions, OPEC Secretary General Haytham al-Ghais said Tuesday on the sidelines of the Davos Economic Forum.

“Crude oil imports (to China) rose by 4% in December and a significant surge in demand for transport fuels is expected as the Lunar New Year begins on Sunday,” PVM’s Tamas Varga said.

He added that reports from the Organization of the Petroleum Exporting Countries (due at 1615 GMT today) and the International Energy Agency (scheduled for Wednesday) would provide more clarity on the resilience of oil demand amid fears of a looming recession.

The dollar’s bounce off seven-month lows weighed on oil prices, as the strength of the US currency raises the cost of oil for holders of other currencies.

Original English post available at code: (Shadia Nasrallah in London with Sonali Paul in Melbourne and Muyu Xu in Singapore)

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