Oil extends rebound following Chinese demand surge

WTI crude oil has gained +1.46%, and is trading at $78.52 per barrel at the time of writing. Brent crude has gained +1%, and is trading at 82.44 per barrel.

Crude Oil has extended its recovery this week, with WTI crude oil reaching a new high on Tuesday. This comes as energy markets anticipate an increase in Chinese Crude Oil demand due to increased purchases from Chinese refineries.

The travel following the Chinese Lunar New Year was higher than expected, causing Chinese Crude Oil inventories to decline faster than expected. This has sparked hopes that Chinese demand will remain high enough to sop up extra capacity.

Maintenance halts are also expected in mainland China, where reduced refining capacity is expected to reach a three-year high, further constraining the supply of refined oil products within China.

The latest week-over-week US Crude Oil Stocks estimates from the American Petroleum Institute (API) indicate a 7.8 million barrel rise in excess barrels along US Crude Oil supply networks. Energy markets are also ignoring fresh hopes for a ceasefire in the Gaza conflict, which might have a negative impact on economies that rely heavily on crude oil and potentially disrupt the Middle East’s supply chain.

WTI remains in the 200-day Simple Moving Average (SMA) near $77.65, with near-term bullish momentum capped below January’s late peak at $79.20.