This rally was supported by the possibility of less aggressive increases to U.S. interest rates and an overall improvement in risk sentiment. Asian equities rose, and the dollar weakened in response.
Brent crude was up 2.8% at $80.79 a barrel, and U.S. West Texas Intermediate crude rose 2.8% to $75.81. The main driver of these gains was the gradual reopening of the Chinese economy, which is expected to boost oil prices.
Despite the rebound in oil prices on Monday, there are still concerns about the potential for another surge in COVID cases due to many Chinese travelers and lingering economic concerns. This is reflected in the market structure, with both near-term Brent and U.S. crude contracts trading at a discount to the next month, a structure known as contango, which typically indicates a bearish sentiment.
