Business News Asia
Crude oil futures closed higher on Monday (Dec. 19), buoyed by hopes that China will reopen the country after easing measures to control COVID-19. However, recession concerns were a factor pressuring the market throughout the day.
- WTI crude futures rose 90 cents, or 1.2%, to settle at $75.19 a barrel.
- BRENT crude futures rose 76 cents, or 1%, to settle at $79.80 a barrel.
WTI crude oil futures recovered after falling in the previous two trading sessions. The market was driven by hopes that China’s opening up and the Chinese government’s planned stimulus package in 2023 will help boost economic activity and revive oil demand.
At the Dec. 15-16 meeting of the Chinese government’s economic working group, President Xi Jinping and senior Chinese officials pledged to revive consumption and support the private sector. Analysts see signals that clearly indicate that the Chinese government’s main goal for 2023 is to increase gross domestic product (GDP), with China likely targeting GDP growth of 5% or more.
The market was also supported by reports that the U.S. Department of Energy will purchase 3 million barrels of oil for its Strategic Reserve (SPR), with delivery scheduled for February 2023.
However, fears of a global recession remain a major factor pressuring the market. Global central banks such as the U.S. Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BoE) raised interest rates at their meeting last week. And signaled that they will continue to raise rates.
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Tuesday, December 20, 2022