WTI reverses Monday’s losses on expectations of China’s reopening

Despite mounting rumours that the Fed will keep tightening monetary conditions, WTI crude oil rose 1.90% on Tuesday in response to new hopes for oil demand as a result of China’s reopening. WTI has therefore reached a low of $75.60 and is currently trading at $77.11, up from its opening price.


As a result of predictions that oil consumption will increase as a result of China’s reopening, WTI has recovered from Monday’s losses. This has countered predictions made by money market futures that the Fed will increase interest rates at least to the 5.25%–5.50% mark. Furthermore, the US Energy Information and Administration (EIA) office said that production in the US fell to 12.10 million bpd, its lowest since April 2022.

Growing demand and decreased freight costs led to an increase in Russia’s oil shipments to China. Nevertheless, the OPEC release, which stated that OPEC+ countries produced 28.97 million barrels per day in February, an increase of 150K from January, put an end to WTI’s surge. Production is still 700K bpd below September 2022 levels, though.

The second half of 2023 is predicted to see oil prices surpass $90 per barrel as Chinese demand increases and Russian production decreases.