Crude oil prices rose slightly in early Asian trade on Tuesday in a market focused on prospects of demand recovery from top importer China and on the global economic outlook ahead of company earnings.
Brent crude LCOc1 had risen 5 cents to $88.24 per barrel by 0116 GMT, while US West Texas Intermediate (WTI) crude CLc1 rose 13 cents to $81.75 per barrel.
Crude oil prices in physical markets have started the year with a rally, as China, no longer held back by pandemic controls, has shown signs of more buying and as traders have worried that sanctions on Russia could tighten supply.
However, crude prices are wavering as the dollar stabilizes and over exhaustion from China-reopening headlines, according to OANDA analyst Edward Moya.
In the United States, “the economy still could rollover and some energy traders are still skeptical on how quickly China’s crude demand will bounce back this quarter,” Moya wrote in a note.
Demand for products has lifted the oil market and refining margins. The 3-2-1 crack spread CL321-1=R, a proxy for refining margins, rose to $42.18 per barrel on Monday, the highest since October.
Investors have piled back into petroleum futures and options at the fastest rate for more than two years as concerns about a global business cycle downturn have eased.
US investors are fairly certain the Federal Reserve will implement a small interest rate rise next week even as it remains committed to taming inflation, which recent data shows is slowing.
This week traders are watching for more business data that could indicate the health of global economies during an earnings reporting season.