Oil prices rose by more than one percent on Monday following China's reopening of its borders, which boosted fuel demand expectations and overshadowed concerns about a potential global recession. This recovery is part of a broader increase in risk appetite driven by measures from China, the world's largest crude oil importer, and hopes of a slower pace of interest rate hikes in the United States, alongside rising stocks and a declining dollar.
Brent crude futures increased by $1.08 or 1.4 percent to settle at $79.65 per barrel. West Texas Intermediate (WTI) crude rose by 86 cents or 1.2 percent to $74.63 per barrel. This recovery followed a decline of more than eight percent in benchmark crude prices last week, marking the largest weekly drop for them at the start of a new year since 2016.
In a "new phase" of the COVID-19 fight, China reopened its borders over the weekend for the first time in three years. The number of domestic trips is expected to reach two billion during the Lunar New Year season, nearly double last year's figures, restoring 70 percent of levels from 2019, according to Beijing.
Despite the recovery in oil prices on Monday, concerns remain that this massive influx of travelers may lead to another surge in COVID-19 cases while economic worries linger on the horizon.
