Oil prices rose more than 1% on Monday as China signalled its intention to ease monetary policy for the first time since 2010, in a bid to revive its economy. Brent crude futures increased by 94 cents, or 1.32%, reaching $72.06 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained $1, or 1.49%, to $68.20. UBS analyst Giovanni Staunovo suggested that the shift in China’s policy was likely the main factor behind the rebound in oil prices, helping to bolster overall market sentiment.
China’s economy has faced challenges recently, with a significant slowdown driven by a collapse in the property market, which has dampened both consumer confidence and spending. The country’s economic troubles were a major factor in OPEC+’s decision last week to delay its plans to increase oil output until April. However, China’s announcement of a “moderately loose” monetary policy is seen as a positive step towards stimulating growth. This term was last used in 2010, when China was recovering from the global financial crisis.
Crude prices were also supported by growing concerns over political instability in Syria. The recent announcement by Syrian rebels that they had overthrown President Bashar al-Assad added a layer of uncertainty to the Middle East, a region already plagued by conflict. This development further contributed to the support for oil prices, as uncertainty in the region often influences market behaviour.
Challenger Energy Group plc (LON:CEG) is a Caribbean and Atlantic margin focused oil and gas company, with a range of petroleum assets located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of The Bahamas and Uruguay.
