Oil has stabilized after five days of gains ahead of key US inflation data as China’s crude oil purchases rise ahead of the Lunar New Year holiday.
West Texas Intermediate was around $77 a barrel after gaining 3.1% in the previous session. Traders and investors are now on the lookout for the consumer price index to be released on Thursday, which will provide an indication of further tightening of monetary policy.
The forecast for oil demand looks optimistic now as China has introduced a large batch of import quotas. Consumption in the largest importer should recover after the end of the national Covid Zero policy.
Physical markets are being actively lifted by Chinese buyers.
The recent rise in oil prices has gained momentum after a difficult start to the year amid fears of a global economic slowdown. Traders and investors have been expecting a big jump in US crude inventories since February 2021, which was largely expected after the cold snap.
The price of Brent crude could rise by $110 a barrel by the third quarter if the economies of China and other Asian countries reopen after restrictions were imposed due to the coronavirus pandemic.
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