Jakarta, GIC Trade – Crude oil prices rose 1 percent in trading on Monday, after China, one of the world's biggest consumers, opened its borders over the weekend for the first time in three years.

Oil prices were boosted by China also issuing a second batch of crude import quotas for 2023, according to sources and documents reviewed by Reuters on Monday, increasing the total for this year by 20 percent from the same period last year.
 
However, analysts warn that growing Chinese demand may be limited in supporting oil prices as the global economy grapples with concerns.

Analysts from Haitong Futures said that social vitality in China's major cities is recovering rapidly and the resumption of Chinese demand is worth looking forward to. However, given that consumption recovery is still at an expected stage, oil prices are likely to remain low and limited.

In addition, CME Group flash data for crude oil futures markets showed open interest increased by nearly 20K contracts, while volume increased by nearly 210K contracts. WTI prices started the week on a positive note amid rising open interest and volume.

Fundamentally, the reopening of China's borders will be a catalyst for increasing demand, thus pushing crude oil prices up. On the other hand, the increase in open interest and volume in the futures market also contributed to the increase. Then how about technically, see the following analysis:

Technical Analysis



To change the bias to bullish, crude oil prices need to pass the 75.45 area, with the next target at the 76.70 level. This increase is supported by the RSI indicator which is already in the oversold area, thus indicating a rebound.
 
Meanwhile, to continue the downward or bearish trend, crude oil prices need to break the 73.85 area to reach the support level at 72.50.
 
This analysis is a fundamental and technical view used by the author, not a suggestion or invitation. For more information click the image below or click here.