WTI Crude Oil Supported by Hopes of China Reopening, Fed Softening Hawkish Stance

Early on Monday, WTI crude oil is enjoying bullish moves as investors continue to look forward to China reopening its economy and easing back on its Zero Covid policy, a move that could spur demand for the commodity. At the time of writing, WTI crude oil is trading at around $ per barrel.

US oil prices closed the previous session after strengthening by 2.9% after the National Health Commission of China revised its COVID-19 prevention and control steps. However, gains remain limited on Monday as worries resurface about an uptick in the number of fresh infections reported in China over the weekend.

As one of the top energy consumers worldwide, traders hope that easing of restrictions across China could boost the demand for oil in this key market. The sentiment is supporting buying activity in the market and supporting crude oil prices globally.

Gains in crude oil also remain limited on Monday over gains in the US dollar index DXY. A stronger greenback makes oil and other commodities more expensive to purchase for international buyers, denting its demand and weighing on oil prices.

Looking ahead, there is some hope for oil traders as a weaker than expected CPI reading in the US boosts expectations for a less hawkish tilt by the US Federal Reserve. Such a move could take the pressure of rising costs and improve the demand for the commodity, supporting crude oil prices.