Oil prices rise on expectations of higher China demand

NEW YORK (APP): Oil prices advanced on Monday as traders were optimistic about demand prospects in China. The West Texas Intermediate for February delivery increased 86 cents, or 1.2%, to settle at 74.63 US dollars a barrel on the New York Mercantile Exchange. Brent crude for March delivery added 1.08 dollars, or 1.4 percent, to close at 79.65 dollars a barrel on the London ICE Futures Exchange.

China’s decision to continue reopening the economy provided material support to commodity markets, Vladimir Zernov, market analyst with market information supplier FX Empire, said on Monday. “Traders bet that the country’s demand for oil will grow at a robust pace” despite temporary challenges with coronavirus, he noted.

Also lending buoyancy to oil was a retreat in the US dollar. The dollar index, which measures the greenback against six major peers, decreased 0.85 percent to 103.0010 in late trading on Monday, following a 1.11-percent drop in the prior session. Historically, the price of oil is inversely related to the price of the US currency.