Oil prices rose on Tuesday after China reported its second-lowest annual economic growth in nearly a half-century. However, hopes for a recovery in fuel demand were boosted by the nation’s most recent change in COVID-19 policy.
Brent crude futures rose 1.4% to $85.65 per barrel, up 1.18 cents. WTI crude in the United States fell 49 cents, or 0.6%, to $80.35.
Because of the Martin Luther King Day public holiday in the United States, there was no settlement on Monday.
China’s GDP will expand by 3% in 2022. It fell short of the official “around 5.5%” target and marked the second-worst performance since 1976, owing to COVID curbs and a property market slump.
After Beijing reversed its zero-COVID policy in December, the economic data still outperformed analysts’ expectations.
Data released on Tuesday showed that China’s oil refinery output fell 3.4% year on year in 2022, the first annual decline since 2001, despite daily December oil throughput rising to the second-highest level of 2022.
Two-thirds of private and public sector economists expect a global recession this year, and about 18 percent think it is “very likely,” according to a poll released by the annual World Economic Forum in Davos.
The Weaponization of Russia’s Oil and Gas Exports
The strategy of Russian President Vladimir Putin to use oil and gas exports as a tool of financial warfare in his country’s campaign to annex Ukraine “is increasingly going awry. It endangered the foundation of Russia’s troubled economy and reduced its geopolitical influence. Putin reasoned that denying Europe, especially Germany, its natural gas supply would cause the continent’s economy to collapse and its populace to experience freezing temperatures, weakening Europe’s support for Ukraine.
Moscow cut the pipeline to Germany in August. However, this effort to “blackmail Berlin” was unsuccessful. Russia’s pipeline gas exports to China are less than a tenth of what it used to export to Europe before the war. Moreover, Beijing has not yet agreed to a second pipeline.
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