Oil prices hit two-week highs

London: Oil prices rose to their highest in two weeks on Tuesday after China posted weak but expectation-beating annual economic growth data and on hopes that a recent shift in its COVID-19 policy will boost fuel demand.

Brent crude futures rose $1.39, or 1.7 percent, to $85.85 a barrel by 11:58 a.m.

U.S. West Texas Intermediate (WTI) crude was up 36 cents, or 0.5 percent, at $80.22. There was no settlement on Monday because of a U.S. public holiday for Martin Luther King Day.

China's gross domestic product expanded 3 percent in 2022, missing the official target of "around 5.5 percent" and marking the second-worst performance since 1976. But the data still beat analysts' forecasts after China rolled back its zero-Covid policy in December.

"China is making the best out of their economic data, and it's fair to say it could have been worse," said Bob Yawger, director of energy futures at Mizuho.

Oil has also been bolstered by a weaker U.S. dollar, which fell against most major currencies on Tuesday due to expectations of a possible Bank of Japan policy shift that could be a precursor to adopting a tighter monetary policy.

A weakening dollar makes greenback-denominated oil less expensive for other currency holders.

Data released on Tuesday showed China's oil refinery output in 2022 had fallen 3.4 percent from a year earlier for its first annual decline since 2001, though daily December oil throughput rose to the second-highest level of 2022.

"The country's crude oil imports were up 4% in December and a considerable demand boost for transportation fuel ... is anticipated when the Lunar New Year begins on Sunday," said PVM analyst Tamas Varga.

The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that Chinese oil demand would grow 510,000 barrels per day this year, while it kept its 2023 global demand growth forecast unchanged at 2.22 million bpd. A monthly report from the International Energy Agency (IEA) on Wednesday will shed more light on the strength of oil demand

while recession fears loom.