WTI remains in bullish territory despite a correction in Asia

WTI remains in bullish territory despite a correction in Asia

Time Stamp: January 9, 2023 9:50 PM
Source Node: 1886935
  • WTI bulls pullback in Asia, but themes are upbeat as China reopens borders.
  • China issued a fresh batch of import quotas, a signal that the world’s largest importer is ramping up to meet higher demand.

West Texas Intermediate, WTI, is down on the Asian session, losing some 0.4% at the time of writing despite hopes demand from China will improve as the country issued new import quotas. Nevertheless, overnight and at the start of the week, the news offered economic support for its flagging economy, while the US Dollar weakened, enabling investors a cheaper entry into the black gold rally. 

Elsewhere, China continued to dismantle much of its strict zero-COVID rules around movement as it reopened its borders to international visitors for the first time since it imposed travel restrictions in March 2020. The BBC reported that ”incoming travellers will no longer need to quarantine, marking a significant change in the country’s Covid policy as it battles a surge in cases. They will still require proof of a negative PCR test taken within 48 hours of travelling.”

As a consequence, oil prices surged early on Monday as hopes demand from China will improve as the country issued new import quotas and offered economic support for its flagging economy. Spot West Texas Intermediate crude was last seen at o $ 74.57 bbls.

Analysts at ANZ Bank explained that ”China issued a fresh batch of import quotas, a signal that the world’s largest importer is ramping up to meet higher demand.”

”Easing COVID-19 restrictions have already boosted travel. Some 34.7m trips within the country were made on the first official day of the Spring Festival travel rush, according to the Ministry of Transport. That’s more than 40% above comparable days in 2022. Roughly 2.1bn trips are expected over the 40-day period. This comes amid tightening supplies,” the analysts said.

Time Stamp:

More from FX Street