Oil prices jump as China reopens its borders
Breanne Deppisch
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Oil prices jumped by 3% this morning, recovering from last week’s sharp losses and reflecting new market optimism as China began to reopen its borders to travelers for the first time since the start of the COVID-19 pandemic.
Traders are hopeful that China’s resumption of travel, announced this weekend, could signal a broader ending to the country’s harsh zero-COVID policies, which have hampered global markets for the past three years and caused a steep demand drop-off from the world’s largest importer of crude.
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Optimism about China’s reopening was reflected in early trading Monday. Futures for international benchmark Brent crude increased by $1.93, up to $80.50 per barrel by midmorning.
Meanwhile, futures for U.S.-based West Texas Intermediate reached $75.85 per barrel, an increase of 2.7%, during the same period.
The gains marked a stark reversal from last week, when both oil benchmarks plummeted by 8%, the biggest single-week declines seen at the start of the year since 2016.
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“The gradual reopening of the Chinese economy will provide an additional and immeasurable layer of price support,” Tamas Varga, an analyst at the oil broker PVM, told Reuters.