Oil rose on expectations of rising demand in the wake of China’s reopening, while the US dollar eased and risks to Russian energy supplies came into sharper focus with fresh curbs looming.
West Texas Intermediate climbed toward $82 a barrel following a back-to-back weekly gain that drove the US benchmark to the highest close since mid-November.
While a weaker US currency supported prices Monday, trading volumes in Asian hours were held back, with national holidays to mark the Lunar New Year affecting key markets including China and Singapore.
Oil has shaken off a weak start to 2023 as China’s outlook has brightened. Expectations that the Federal Reserve is close to ending its series of aggressive rate hikes have also buoyed prices.
Further restrictions on Russian energy flows are due to kick in early next month as the war in Ukraine grinds on. US Treasury Secretary Janet Yellen expressed confidence at the weekend that curbs on Russian crude sales can be expanded to refined products, while acknowledging that the task will be more complicated.
Meanwhile, Moscow is set to publish a decree detailing a ban on Russian firms selling oil to clients adhering to a price cap, Kommersant said.
In Europe, France’s CGT union is planning strike action this week in the energy sector, further stoking fuel-supply concerns.
“The key supportive elements of French refinery strikes and the upcoming Russian oil-product ban are playing into European middle-distillate markets more decisively, while a weakening dollar could propel crude a leg higher,” said Harry Altham, an analyst at brokerage StoneX Group.