Oil prices rise after China opens its borders

Oil prices rose on Monday, a day after an influx of travellers into China following the reopening of borders raised expectations for fuel demand and partially offset fears of a global recession.

Brent crude futures rose 90 cents, or 1.2 percent, to $79.47 a barrel by 0520 GMT, while US West Texas Intermediate crude was $74.67 a barrel, up 90 cents, or 1.2 percent.

Hopes of less sharp increases in interest rates in the US are boosting financial markets and leading to a decline in the dollar. A weaker dollar makes dollar-denominated commodities more accessible to investors holding other currencies.

Both Brent and West Texas Intermediate crude fell more than 8 percent last week, their biggest weekly drop at the start of a new year since 2016.

China, the world’s second-largest oil consumer, opened its borders on Saturday for the first time in three years, boosting its demand for transport fuel.

Domestic flights are expected to reach two billion during the Lunar New Year season, nearly double last year’s traffic and restoring 70 percent of 2019 levels, Beijing says.

However, there are still concerns that this massive influx of travellers will lead to a further increase in COVID-19 infections and limit the recovery in Chinese economic activity.