Crude oil futures settled higher on Tuesday, extending gains from the previous session, amid hopes the Chinese government will consider relaxing its zero-Covid policy sometime soon.
Investors are also hoping the Organization of the Petroleum Exporting Countries and their allies, known collectively as OPEC+, will look to support prices. The group is scheduled to meet later this week.
West Texas Intermediate Crude oil futures for January ended higher by $$0.96 or about 1.2% at $78.20 a barrel.
Brent crude futures were up $0.68 or 0.82% at $84.57 a barrel a little while ago.
Mainland China reported the first decrease in new Covid infections in more than a week on Monday, generating some positive sentiment.
Chinese health officials also released a plan to boost vaccinations for elderly people and said they are “closely watching” the virus as it evolves and mutates.
The officials defended China’s zero-Covid policy at a press briefing on Tuesday but said lockdowns would be lifted “as quickly as possible.”
Traders also looked ahead to weekly oil reports from the American Petroleum Institute (API) and the Energy Information Administration (EIA).
The API’s report is due later today, while EIA is scheduled to release its inventory data Wednesday morning.