Crude oil prices traded higher on Tuesday as a result of China’s plans to relax Covid-control norms in order to boost its economy. In addition, the US government’s decision to replenish its strategic petroleum reserves boosted the commodity’s price.
Brent crude futures rose 61 cents, or 0.8%, to $80.40 per barrel at 0124 GMT, following a 76 cent gain the day before. West Texas Intermediate (WTI) crude futures in the United States rose 65 cents, or 0.9%, to $75.84 per barrel, after rising 90 cents the previous session.
According to market reports, China has begun relaxing Covid-control measures in order to stimulate the economy. Recent China road and air transport statistics revealed an increase in fuel demand.
For a year, Covid-related control measures have had an impact on the Chinese economy. China is a major consumer of crude oil, and any disruption in economic activity affects global demand.
However, market reports have warned that the recent increase in the number of Covid cases in China may cause market volatility.
The US Energy Department’s decision to replenish its strategic petroleum reserves also boosted crude oil prices.
Following the US government’s decision in March to release approximately 180 million barrels of crude oil from strategic petroleum reserves to combat rising commodity prices, the stockpile had reached its lowest level in 40 years.
The US Energy Department intends to replenish the strategic petroleum reserves when the crude prices are trading at lower levels.