Oil hovers near a three-month high as China moves to support growth.
Oil traded at a three-month high as the global market showed signs of tightening, as China took more action to support economic growth and aided the energy demand outlook.
U.S. crude rose more than 4% in three sessions to $79 a barrel. Top leaders in China, the largest importer of crude oil, have signaled greater support for the real estate sector, along with commitments to boost consumption, despite avoiding major fiscal or monetary easing.
Oil rallied in the first weeks of the second half after the Organization of the Petroleum Exporting Countries and its allies slashed supply to help drain global stockpiles. That offset the pressure from Fed Chairman Jerome Powell’s monetary tightening campaign, and another spike is expected this week.
“Most of the crude oil’s gains this month have come from investors’ delight that the Fed is potentially ending rate hikes and pushing the US economy into soft landing,” said Vandana Hari, founder of Vanda Insights in Singapore.
Both US crude and global benchmark Brent closed above their 200-day moving averages for the first time in nearly a year on Monday. If sustained, this can help encourage additional purchases.