Oil Trades Mixed After China Posts Weakest Economic Growth In Half A Century

Oil prices were mixed on Tuesday following China recording its weakest economic growth in about half a century, while reversal from its zero-COVID policy late last year kept hopes of recovery alive.

Brent crude futures were trading higher by 0.38% at $84.78, recouping some of the loss from the previous session. However, U.S. West Texas Intermediate (WTI) crude futures fell 0.48%, to $79.48, at the time of writing.

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The United States Brent Oil Fund BNO closed 1.74% higher on Friday while the Vanguard Energy Index Fund ETF VDE closed 0.18% higher.

China's gross domestic product grew by 3% in 2022, missing the official target of "around 5.5%" and recording the second-worst performance since 1976, according to Reuters. 

Despite the poor numbers, economic data still beat analysts' prior forecasts as China’s rollback of its zero-COVID policy in December boosted consumption.

“Brent crude has gained nearly 10% over the past 10 days as optimism over China’s reopening boosted sentiment. However, the outlook for the rest of the global economy is uncertain,” analysts at ANZ Research wrote in a note.

They further said that investors are wary of upcoming sanctions on Russian oil products. “From 5 February, the European Union and G7 will attempt to cap the price of Russia’s fuel exports. It will have to replace about 600kb/d of diesel imports,” the analysts noted.

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