Oil prices rise sharply on prospects of a recovery in Chinese demand

Oil prices began the week with a sharp rise, driven mainly by hopes of a recovery in fuel demand in China and easing concerns about a global economic recession. North Sea Brent crude was up more than three percent at around 13:30 CET, rising above 81 dollars a barrel. US light crude West Texas Intermediate (WTI) posted an even larger gain and was trading above 76 dollars a barrel.

China, the world's largest oil importer, is now easing coronavirus restrictions that had held back economic activity and fuel demand in the country. Analysts say oil prices are also being supported by hopes that the US Federal Reserve (Fed) will be less aggressive in raising interest rates.

„If we avoid a (global economic) recession, global oil demand and its growth will remain resilient,“ said Tamas Varga, an analyst at PVM.

He said today's rise in oil prices is mainly due to the prospect of a gradual reopening of the Chinese economy.