LONDON: Global stock markets and oil rallied on Tuesday on hopes that China will ease its weeks-long Covid lockdown and gradually reopen businesses.

Oil prices rose to over $115 a barrel, their highest in about seven weeks.

Brent crude rose 91 cents to $115.15 a barrel by 11:11am EDT (1511 GMT), and US West Texas Intermediate (WTI) crude was 77 cents higher at $114.97 a barrel.

During the session, Brent rose to a session high of $115.69, its highest since March 28, while WTI hit $115.56 per barrel, highest since March 24.

European exchanges closed higher and Wall Street’s main indices also rose in mid-day trading, spurred by a nearly one-percent rise in April retail sales.

“We’ve seen a much more positive vibe around European equity markets today, with reports out of Asia suggesting that China might be close to looking to ease some of its Covid restrictions, as case rates come down,” Michael Hewson, chief market analyst at CMC Markets UK, said.

“This hope appears to be helping to power some buying interest, and is also pushing up metals, as well as oil prices, with Brent crude at six-week highs,” he added.

Much of Shanghai, China’s economic hub and a city of 25 million, has been under lockdown since April as Beijing attempts to stamp out an Omicron-fuelled virus surge under its strict zero-Covid policy.

The impact of Beijing’s zero-Covid strategy on the world’s second-largest economy was revealed Monday when official data showed that retail sales and industrial production in April on-year had slumped to their lowest levels in more than two years.

World markets have also been roiled by surging inflation, spiralling oil and wheat prices and Russia’s war in Ukraine — leaving investors jittery.

Published in Dawn, May 18th, 2022