Dubai: Oil jumped to the highest in more than three weeks as markets rallied on optimism over China easing its Covid restrictions, while US jobs data beat expectations.
West Texas Intermediate futures surged more than 4 per cent near $92 a barrel, with the world’s biggest crude importer said to be working on plans to scrap a system that penalizes airlines for bringing virus cases into the country.
Crude’s advance extended after US jobs figures came in stronger expected. That brought the global Brent benchmark closer to its 100-day moving average, a level that could spur buying from momentum-driven traders if it is broken.
China’s Covid Zero strategy relies on lockdowns and mass testing to stamp out infections and has weighed heavily on the nation’s economy this year. Bank of China International Ltd. analysts including Xiao Fu estimate that the country’s oil demand will decline by 400,000 barrels a day in 2022 due to virus curbs.
“Oil is benefiting from hopes on easing of Chinese mobility restrictions,” said Giovanni Staunovo, a commodity analyst at UBS Group AG.
Oil futures have swung in recent sessions along with broader market trends and shifts in the dollar, while lackluster trading volumes have led to more volatility. Investors are also grappling with a tightening supply outlook and concerns over a global economic slowdown.
Saudi Arabia trimmed its oil prices for December sales to Asia, highlighting some concern over the outlook for demand. The kingdom sells most of its crude under long-term contracts to the region. However, the OPEC+ alliance will make sizable cuts to output from this month, which will be followed by European Union sanctions on Russian crude flows from December.