Oil spikes on reopened China and ‘hopes’ of refinery supply
As energy sector spikes across the board, airline stocks takeoff on potential Lunar New Year demand
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Former Trump deputy national security adviser KT McFarland discusses China's response to the United States over COVID travel screenings on 'Maria Bartiromo's Wall Street.'
Oil prices are up as investors pin hopes that Chinese refineries will offload a sizable surplus of crude following the country’s decision to end three-years of zero-COVID policy.
China started reopening its borders on Sunday, ending long quarantine requirements for travelers, while the U.S., South Korea, Japan, Australia, Italy, Canada, and others are requiring Chinese travelers to have a negative COVID-19 test before departing the country, drawing sharp rebukes from Chinese officials.
Aerial view shows a crude oil tanker at an oil terminal off Waidiao island in Zhoushan, Zhejiang province, China, Jan. 4, 2023. (China Daily via Reuters. This image was provided by a third party: China out. / Reuters Photos)
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Edward Moya, a senior market analyst for OANDA in New York told FOX Business, "Oil prices are rising on hopes that China's reopening is beginning to gain traction, and alongside a weakened dollar, it’s a cherry on top for today's oil market rally."
"Chinese refineries have impressive quotas too, which suggest crude demand is roaring back," he continued. "There are also hopes that China's Lunar New Year will see robust jet fuel demand."
On Monday, the cost of West Texas Intermediate has spiked roughly 3% to $75.55 a barrel, while noted industry names like Hess, Warren Buffett’s Occidental Petroleum, and Diamondback Energy are all rallying well into positive trading. Brent crude was trading around $80 a barrel.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HES | HESS CORP. | 151.62 | -1.59 | -1.04% |
| OXY | OCCIDENTAL PETROLEUM CORP. | 68.34 | -0.67 | -0.97% |
| FANG | DIAMONDBACK ENERGY INC. | 205.35 | -0.99 | -0.48% |
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Airline stocks take off
Also on Monday, airline stocks are lifting off as investors eye jump in fuel demand for Chinese Lunar New Year.
China's reopening also benefited airlines stocks. Shares of U.S. and Chinese air carriers are up as names like Delta Air Lines and Chinese Eastern Airlines trade well into the green.
‘’The lifting of quarantine requirements for incoming travelers with now only a negative PCR test needed, will come as a sharp relief for the Chinese business community," said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown. "Domestic travel will also get a significant boost with the issuing of visas for Hong Kong and Macau resuming."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DAL | DELTA AIR LINES INC. | 46.65 | -0.21 | -0.45% |
| CEA | n.a. | n.a. | n.a. | n.a. |
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Paul Best Contributed to this report.
China travelers required to show negative test
Hudson Institute Director of the center strategy Michael Pillsbury discusses the recent restrictions placed on Chinese travelers to U.S. on ‘Fox Business Tonight.’