Oil slips but holds near 2023 peak on China demand hopes

(Updated quotes, quote)

LONDON, Jan 16 (Reuters) – Oil prices are holding near this year’s highs on Monday on optimism that China’s opening could boost fuel demand in the world’s biggest oil importer.

Futures for Brent crude by 16:36 Moscow time fell by 0.67% to $84.71 per barrel, WTI – fell by 0.55% to $79.42 per barrel.

Both benchmarks rallied more than 8% last week – the strongest since October – likely spurring short-term profit-taking selling.

Oil imports to China increased by 4% in December in annual terms, and the expected surge in the number of trips during the celebration of the Lunar New Year allows us to predict a large demand for transport fuel.

Travel volume in China continues to recover from record lows after the easing of anti-coronavirus restrictions, resulting in increased demand for oil and petroleum products, analysts at ANZ said in a note.

At the same time, reports of an increase in the number of deaths due to COVID-19 in China put pressure on sentiment.

“While the outlook for China has changed, it should be noted that the normalization of oil demand will be gradual … At present, the recovery of the Chinese oil market is expected rather than realized,” said Steven Brennock of PVM.

UAE Energy Minister Suheil al-Mazroui said on Monday that he considers the current situation in the oil market to be balanced.

This week, the Organization of the Petroleum Exporting Countries and the International Energy Agency will publish monthly reports that investors attach great importance to.

In addition, attention will be paid to the meeting of the Bank of Japan this week, which will determine whether the regulator will continue the ultra-loose monetary policy.

Original English message available at code: (Rowena Edwards with contributions from Florence Tan and Jeslyn Lerch)

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