China’s demand and rate rises to keep oil prices constant. Investors balanced robust holiday travel in China, which might raise gasoline consumption, against rising interest rates abroad, which could limit economic development. As a result, oil prices were unchanged on Tuesday.
At 0345 GMT, Brent crude jumped 4 cents to $82.77, and WTI rose 6 cents to $78.82.
On Monday, oil futures rose over 1% on hopes that Chinese holiday travel will boost gasoline consumption in the world’s second-largest economy.
Chinese May Day holiday bookings indicate a prolonged resurgence in Asian tourism. However, the numbers remain well below pre-COVID levels, with long-haul prices rising and short flights.
“Investors expressed optimism that Chinese holiday travel would boost fuel demand in the world’s largest oil importer,” said CMC Markets analyst Leon Li.
“In addition, expectations for a slowdown in U.S. gross domestic product growth in the first quarter prompted a pullback in the U.S. dollar index yesterday, supporting gains in oil prices.”
A weaker U.S. dollar lowers oil prices for foreign currency holders, increasing worldwide demand.
Investors worry about central banks in the US, Britain, and the E.U. raising interest rates to limit inflation, which may halt economic development and reduce energy consumption.
When they meet in the first week of May, the U.S. Federal Reserve, Bank of England, and European Central Bank will likely hike rates.
Investors expected U.S. oil inventory data Tuesday. Reuters surveyed analysts anticipated U.S. oil stocks to fall by 1.7 million barrels in the week to April 21.
Wednesday brings U.S. government inventory statistics.
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