Oil rose as a number of measures taken by China to stimulate the economy affected the demand outlook.
Oil rose as investors weighed the demand outlook after China took some measures to bolster its ailing real estate market.
U.S. crude was trading above $73 a barrel after closing the previous session at a one-week high, down 1.2 percent. In China, authorities have increased pressure on banks to ease conditions for real estate companies, encouraging negotiations to extend outstanding loans. Leading state-run financial newspapers published news on Tuesday signaling the possibility of further supportive policy adoption.
China’s sluggish economic recovery, monetary tightening by central banks and resilient crude flows from producers including Russia and Iran have provided headwinds for oil this year. This prompted OPEC+ heavyweights Saudi Arabia and Russia to cut supply to support prices.
Investors will watch the consumer price index on Wednesday for clues on interest rates and the monthly reports from OPEC and the International Energy Agency on Thursday for oil market snapshots. Ahead of these releases, the US will present its Short-Term Energy Outlook.
Warren Patterson, head of commodities strategy at ING Groep NV, said: “The Saudi cuts and the prospect of more support measures for the Chinese real estate sector seem to give the market a firmer footing. Tomorrow’s US CPI release will shape market expectations for Fed policy in the coming months, and will shape the price direction in the near-term. It’s going to be a lock for me,” he said.