Demand expectations from China and promised replenishment of U.S. SPR from February support oil

On Monday, oil prices are rising. After large losses in the previous session, markets expect to see a resumption of demand. The recovery of economic activity in China and the U.S. presidential administration’s announcement on the start of replenishment of its strategic oil reserves had a positive impact on the prospects for prices.

According to Reuters, the recovery of crude oil markets was due to the intentions of the president and other Chinese authorities to stimulate economic growth after a year of COVID-19 lockdowns.

At the moment, China has begun easing certain measures aimed at combating COVID-19. The latest data on road transport and air transportation demonstrate a growing demand for fuel.

At the same time, the U.S. government's announcement to start replenishing the Strategic Petroleum Reserve (SPR) from February also acted as a buy signal for the markets.

Concerns about a reduction in the supply of oil in the United States, reinforced by the earthquake in West Texas, had a favorable effect on prices. Crude oil prices may strengthen due to growing demand for fuel oil in the near future. This is signaled by expectations of a colder than planned winter.