Oil prices are at a two-week high supported by expectations of a recovery in Chinese demand

Oil prices rose to a two-week high on Tuesday after China reported weak economic growth data that beat expectations, supported by hopes that Beijing’s change in policy to combat COVID-19 will boost fuel demand.

By 1224 GMT, Brent crude futures rose $1.14, or 1.4 percent, to $85.60 a barrel.

West Texas Intermediate crude futures rose 47 cents, or 0.6 percent, to $80.33 a barrel. There was no closing price on Monday due to the US public holiday marking National Day commemorating the famous civil rights leader Martin Luther King.

China’s gross domestic product grew by 3 percent in 2022, far short of the official target of nearly 5.5 percent, marking the Asian giant’s second-worst performance since 1976.

But the data still beat analysts’ expectations after Beijing abandoned its zero-Covid policy in December.

Data on Tuesday revealed that Chinese oil refinery production in 2022 fell 3.4 percent year-on-year, the first annual drop since 2001, although daily oil production in December rose to the second-highest level in 2022.

On the other hand, the recovery of the dollar from its lowest levels in seven months put pressure on oil prices, as the rise in the dollar makes oil more expensive for those holding other currencies.