Oil prices rose more than 4% yesterday boosted by a wider market pickup on positive news from China, after three days of losses due to fears about a weakening global economy.
Brent futures were up 4.3%, at $60.79 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $2.42, or 4.5%, to $56.36.
That put WTI on track for its biggest daily percentage increase since July 10.
Stock indexes worldwide rebounded as easing geopolitical concerns and upbeat economic data from China brought buyers back to the equities market.
A private survey showed that activity in China’s services sector expanded at the fastest pace in three months in August as new orders rose, prompting the biggest increase in hiring in more than a year.
In addition, investor risk appetite was further revived after Hong Kong withdrew the contentious extradition bill at the heart of recent protests.
China is the world’s second-largest oil consumer and largest importer.
In the United States, crude stockpiles were expected to have declined for a third straight week, a Reuter’s poll showed, ahead of weekly data from the American Petroleum Institute (API) on Wednesday, and the government on Thursday. Both reports are delayed a day due to the U.S. Labor Day holiday.
Some analysts, however, noted overall fundamentals of the oil market remained discouraging.
“Oil prices however remain focused on the trade war and the longer we don’t see a date scheduled for a face-to-face meeting between Chinese and U.S. officials, the greater the odds we could see a retest of the summer lows,” Edward Moya, senior market analyst at OANDA in New York, said in a report.
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