Oil Prices Rebound on Hopes of Increased China Demand

This year’s rollercoaster ride for oil prices continues, with prices recovering from a brief sell-off to gain last week, driven by renewed optimism around demand from top oil importer China.

Brent crude futures rose 1.4% to settle at $86 a barrel. US West Texas Intermediate (WTI) crude futures settled at $80 a barrel, up by almost 2%. Both benchmarks posted their highest closing levels for nearly a month.

Prices had dropped earlier by over $2 per barrel after a media report said the UAE was debating leaving OPEC and pumping more oil. Prices rebounded when well-placed sources revealed the story was untrue. 
Brent and WTI notched their third biggest weekly percentage gains this year as strong Chinese economic data fed hopes for oil demand growth.

China's service sector activity in February expanded at the fastest pace in six months, and

manufacturing activity also grew. This positive news was welcomed after Chinese authorities

released a muted GDP growth target of 5% for 2023.

China, the world's biggest oil importer, is key to how positive oil markets feel about the rest of the year. 
Indeed, the oil market mostly ignored a 10 th consecutive week of US crude stock builds, even though record exports of US crude meant more support for prices.

Some analysts have said that signs of the US dollar weakening slightly suggest the greenback will be under pressure over the next year, which would make dollar-denominated oil cheaper for holders of other currencies.