Oil Jumps at Start of Week With China Optimism Spurring Gains

West Texas Intermediate futures surged above $76 a barrel Monday, rebounding from last week’s 8.1% drop, as China issued a fresh batch of crude oil import quotas. A Chinese central bank official also said the nation’s growth would be back on track soon as Beijing provides more financial support to households and companies, according to an interview with People’s Daily, the Chinese Communist Party mouthpiece.

“China reopening remains the major bullish catalyst story out there,” said Keshav Lohiya, founder of consultant Oilytics. “We are generally on the oil bull side, but the price rise will not be a straight line as it was in 2004-2008.”

The Federal Reserve may lean toward smaller interest-rate rises after wage growth cooled in December, another step down in its aggressive campaign of monetary tightening. That’s put pressure on the US dollar, which slipped again Monday, and added to tailwinds for commodities priced in the currency.

This week also marks the beginning of the annual rebalancing of the largest commodity indexes, a period usually characterized by volatile flows across raw materials markets. The period should see more than $1 billion of inflows into the global Brent benchmark, while leading to outflows from WTI, according to separate estimates from Citigroup Inc. and Societe Generale SA.

Prices:

• WTI for February delivery advanced 3.1% to $76.09 a barrel at 10:45 a.m. in London.
• Brent for March settlement rose 2.8% to $80.79 a barrel.

The Biden Administration is delaying purchases to refill the emergency oil reserve after deciding that the offers it received were either too expensive or didn’t meet the required specifications, according to people familiar with the matter.