Oil prices rally as investors await key data from China

By Sibel Morrow

Oil prices posted limited gains on Monday as investors awaited the release of Chinese economic data as well as comments from US Federal Reserve (Fed) officials to obtain guidance on further interest rate increases.

International benchmark Brent crude traded at $84.14 per barrel at 10 a.m. local time (0700 GMT), a 0.23% rise from the closing price on Friday of $83.95 per barrel.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $80.11 per barrel, up 0.35% from the previous session close of $79.83 per barrel.

The Chinese government’s initiatives to boost its economy and markets lent support to crude oil prices during early Asian trade.

At the weekend, the government announced plans to reduce by half the stamp duty on stock transactions as of Monday. This is the first decrease of its kind since the 2008 global financial crisis and is part of the government’s most recent stimulus measures in response to the nation's patchy economic recovery.

The world’s second-largest economy had also cut a key interest rate amid concerns about the post-pandemic recovery.

Investors are now awaiting China’s forthcoming industrial data to see the oil demand trajectory of the world’s largest oil importer.

Meanwhile, oil markets also focused on US Fed officials’ statements after Federal Reserve Chair Jerome Powell on Friday signaled additional interest rate hikes while also highlighting "progress has been made".

"Although inflation has moved down from its peak—a welcome development—it remains too high," Powell said during his keynote speech in Jackson Hole, Wyoming.