The latest easing in Covid-19 measures announced by officials in China, the world’s top importer of crude oil, has had a profound effect on the oil markets, as oil prices have jumped more than 2% after the announcement.
China’s Zero-Covid policy initially relied on lockdowns and mass testing to prevent the spread of infections, which weighed heavily on the country’s economy and produced little to no positive results.
Investors have been watching the news closely in anticipation of any relaxation to the measures, which have finally been announced. The new measures include shortening quarantine times for close contacts of cases and arriving travelers by 2 days, as well as eliminating a previously imposed penalty on airlines that bring affected passengers into the country.
Other reasons for the rise of crude oil prices include a weaker U.S dollar, as well as milder than expected U.S inflation data.
It is also expected that further relaxation in the zero-covid policy in China, can be a driver for crude oil prices down the line.
At the time of this article, WTI crude oil (USOIL) futures have gained $2.24 (2.6%) to $88.71 a barrel, after climbing 0.8% in the previous session.
Brent crude oil (UKOIL)futures rose up $2.39 (2.6%) to $906.06 a barrel, prolonging the previous session’s rise of 1,1%.
Given the current data, the Crude oil price by the end of the year is speculated to remain stable, with WTI crude oil forecasted to be about $88.74 per barrel, at the end of 2022.
With everything going on in the world, as well as the recent gain of oil stocks in the S&P 500, it seems like investing in crude oil would be a… slick move.
By Mario M. Plousiou