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Oil edged lower, with many Asia-based traders offline for holidays to mark the Lunar New Year, as investors assessed the outlook for demand following China’s reopening and risks to Russian output in 2023.

West Texas Intermediate eased toward US$81 a barrel following two weekly gains that saw the US benchmark close at the highest level since mid-November.

Oil trading in Asian hours will be held back on Monday, with national holidays in markets including China, Hong Kong and Singapore. China’s shift away from Covid Zero has bolstered expectations that consumption in the largest importer will expand.

Following the pivot, many more Chinese people travelled back to their hometowns for the lunar festival this year, and industrial activity is expected to pick up when workers return.

Oil has shaken off a weak start to the new year to move higher as China’s outlook brightened. Additional support for crude has come from expectations that the Federal Reserve is close to ending its series of aggressive rate hikes, which has weakened the dollar.

SLB, the last of the major oilfield-service providers doing business in Russia, warned last week that drilling and related work in the country will slump this year as its international isolation deepens. — Bloomberg.