Oil Rises Slightly After Optimistic China Data
Oil prices rose on Tuesday (January 20) after stronger-than-expected Chinese economic growth data sparked demand optimism. However, the market remained cautious, as US President Donald Trump renewed his threat to raise US import tariffs on several European countries, in line with his stated ambition to "buy" Greenland.
Brent futures rose 19 cents (0.3%) to $64.13 per barrel at 01:00 GMT. Meanwhile, the February US WTI crude contract—which expires on Tuesday—rose 25 cents (0.4%) from Friday's close to $59.69. The more actively traded March WTI contract rose 0.08 cents (0.13%) to $59.42. WTI did not settle on Monday due to the Martin Luther King Jr. Day holiday in the US.
According to IG market analyst Tony Sycamore, WTI edged higher and was supported by better-than-expected Chinese GDP data for the fourth quarter of 2025. He assessed that China's economic resilience—as the world's largest oil importer—has contributed to boosting global demand sentiment.
Data released Monday showed that the Chinese economy grew 5.0% last year, in line with the government's target. This growth was driven by a strategy of boosting exports and capturing a portion of global demand for goods, to offset weak domestic consumption. This strategy had temporarily mitigated the impact of US tariffs, but is considered increasingly difficult to maintain.
From the energy industry perspective, China's refinery throughput in 2025 rose 4.1% year-on-year, while crude oil production increased 1.5%. Both are said to have reached all-time highs, reinforcing the narrative that China's energy activity remains robust.
Meanwhile, trade tensions escalated again over the weekend. Trump said the US would impose an additional 10% tariff starting February 1 on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the UK. The tariff could even rise to 25% starting June 1 if no agreement is reached regarding Greenland.
Sycamore also added that the weakening US dollar also provided a tailwind for oil prices. The dollar fell about 0.3% against other major currencies, and a weaker dollar typically makes oil (priced in dollars) cheaper for buyers outside the US.
The market is also monitoring Venezuela's oil sector after Trump declared the US would "run the industry" following the arrest of President Nicolas Maduro. Meanwhile, trade sources said Vitol is offering Venezuelan oil to Chinese buyers at a discount of about $5 per barrel to ICE Brent for April delivery.
Finally, China is reportedly importing the most Russian Urals crude since 2023, at a price lower than Iranian oil. This comes after major buyers like India sharply reduced imports due to Western sanctions, and ahead of a European Union ban on products made from Russian oil—according to trade sources and shipping data.
Source: Reuters.com
