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 $1.59, or 1.9%, to $86.05 a barrel by 1414 GMT.

US West Texas Intermediate (WTI) crude was up 88 cents, or 1.1%, at $80.74. There was no settlement on Monday because of a US public holiday for Martin Luther King Day.

China’s gross domestic product expanded 3% in 2022, missing the official target of “around 5.5%” and marking the second-worst performance since 1976.

OPEC says Chinese oil demand to rebound in 2023 after drop

But the data still beat analysts’ forecasts after Beijing’s rolling back of its zero-COVID policy in December.

“A shallower economic hit in China from the COVID transition … has driven the latest rebound in crude prices,” said OANDA market analyst Craig Erlam.

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

Oil near 2023 highs on Chinese demand recovery expectations

“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 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.

In a survey released at the annual World Economic Forum in Davos, two thirds of private and public sector economists polled expected a global recession this year.

A survey of chief executives’ views by PwC was the gloomiest since the poll was launched a decade ago.