Oil Rises as China Sparks Optimism With Generous Demand Outlook
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(Bloomberg) -- 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.
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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