Oil Rallies On China Demand Optimism
Oil prices rallied on Wednesday amid expectations of firmer fuel demand from China, as Shanghai formally ended its two-month citywide lockdown and a private survey showed China’s factory activity shrank less sharply in May than expected.
Benchmark Brent crude futures climbed 1.5 percent to $117.35 a barrel in European trade, while U.S. crude futures were up 1.6 percent at $116.48.
The upside comes despite reports that some OPEC members are exploring the idea of suspending Russia’s participation in an oil-production deal.
Shanghai ended the lockdown for all of its 2.67 million businesses, prompting expectations of firmer fuel demand from the country.
On the data front, the China Caixin/Markit manufacturing PMI rose to 48.1 in May from a 26-month low of 46.0 the previous month.
Elsewhere, manufacturing expansion slowed in Australia and Japan’s manufacturing activity grew at the weakest pace in three months, underlining investor worries over the economic slowdown.
In Europe, weak German retail sales and Eurozone manufacturing PMI data revived worries about a deepening slowdown.
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