Oil dips, but hovers near 2023 highs on China demand optimism

Oil prices dipped in early Asian trade on Monday, but held close to the highest levels since the start of the year on optimism that China’s reopening will lift fuel demand at the world’s top crude importer. Brent crude fell 36 cents, or 0.4 per cent, to $84.92 a barrel by 0116 GMT while US West Texas Intermediate crude was at $79.65 a barrel, down 21 cents, or 0.3pc amid thin trade during a US public holiday. Both contracts rose more than 8pc last week, the biggest weekly gain since October, after China’s crude imports rose 4pc year-on-year in December while Lunar New Year travel brightens the outlook for transportation fuels. Traffic levels in China are continuing to rebound from record low levels following the easing of Covid-19 restrictions, resulting in stronger demand for crude and oil products, ANZ analysts said in a note.