International oil prices rose nearly 3%, and Chinese demand improved, but bulls faced two other risks

International oil prices climbed nearly 3% on Monday (Jan.
9) as China, the world's largest crude importer, reopened its borders, boosting prospects for fuel demand growth and offsetting fears
of a global recession.
But traders reassessing the impact of cold weather on energy demand, coupled with lingering fears of a recession in broader global markets, are expected to limit oil price gains
.

On January 8, China reopened its borders
after three years.
Officials had previously predicted that about 2 billion trips were expected during the Lunar New Year, almost double last year's, and return to 70%
of 2019 levels.
According to aeronautical data provider Cirium, airlines in various countries increased their flights after their borders opened, with international capacity to and from China increasing by 9.
5%
in January.

Analysts said Chinese airlines are expected to be early winners in the country's reopening of international flights, having prepared most wide-body aircraft and employees while foreign airlines have struggled
with capacity restrictions after previous borders with other countries opened.

Cirium data showed that international capacity scheduled to enter and leave China rose 23% in February from the previous week and 13%
in the same period in March.
After the start of the summer flight schedule season, which began on March 26, capacity is expected to increase significantly to 4.
3 million in April, to around 1.
85 million, 2 million and 2.
7 million
in January-March, respectively.

But crude futures plunged into the new year as traders reassessed the impact of cold weather on energy demand, and fears of a broader global market recession remained, an uncertainty that could send oil prices up and down
in the short term.

U.
S.
energy companies reduced the number of active oil and gas rigs by seven last week, the biggest weekly drop since September 2021
, energy services company Baker Hughes said.

According to a DOE spokesperson, the DOE rejected the first bid by oil companies to replenish a small amount of crude oil to the National Emergency Reserve in February, and "after reviewing the initial submissions, the DOE will not make any incentive selection for the February delivery window, and Energy will only select bids that meet the specifications of crude oil and are affordable
.
" ”

The U.
S.
Department of Energy said last month it would buy up to 3 million barrels of oil for delivery to the Strategic Petroleum Reserve
in February.
It was the first purchase
since last year's record release of 180 million barrels of oil supply to curb soaring U.
S.
oil prices.