Higher oil prices due to Chinese demand

Oil prices ended the session higher, erasing losses at the start of the session as investors grew increasingly optimistic about supporting travel during a holiday in China.

Brent crude oil closed up $1.07, equivalent to 1.3% to $82.73 per barrel, while West Texas Intermediate crude crude closed up 89 cents, or 1.1%, to $78.76.

Last week, both crude contracts fell by more than 5% in their first weekly decline in five weeks.

Bookings in China for foreign flights during the upcoming Labor Day holiday indicate a sustained recovery in travel to Asian countries, but the figures are still far from pre-COVID-19 levels with high long-haul airline fares and inadequate flights.

“There is a lot of optimism about Chinese holidays regarding the demand for aviation fuel,” said Bob Yoger, director of energy futures at Mizuho.

Supply constraints due to additional production cuts planned by the OPEC + group of producers from May could raise prices.