China’s generous quota for crude imports boosted oil with renewed hopes for a demand revival in the world’s largest buyer.
West Texas Intermediate rose 1.2% to settle above $74 a barrel on Monday. China issued a fresh batch of crude oil import quotas, a signal it’s gearing up to meet higher demand. A weaker dollar also boosted the appeal of commodities priced in the currency. Prices rallied as much as 4% intraday but with the forward curve still flashing weakness ahead, many traders said prices near $77 were a trigger to sell.
This week also marks the beginning of the annual rebalancing of the largest commodity indexes, a period usually characterized by volatile flows across raw materials markets. The period should see more than $1 billion of inflows into the global Brent benchmark, while leading to outflows from WTI, according to separate estimates from Citigroup Inc. and Societe Generale SA.
WTI for February delivery advanced 86 cents to settle at $74.63 a barrel in New York.
Brent for March settlement rose $1.08 to settle at $79.64 a barrel.
Crude had a sluggish start to the year, posting a drop of around 8% last week as nearby oil markers flash signs of weakness. For now traders are awaiting signs of a meaningful uptick in Chinese demand, though there has been improvement in mobility gauges over recent days.
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