Oil prices have risen from their lowest levels in nearly two months, thanks to improved demand from China.

Oil prices have risen from their lowest levels in nearly two months, thanks to improved demand from China, amid ongoing concerns about oversupply in the market.

Brent crude climbed towards $62 a barrel, while West Texas Intermediate was near $58 in weak trading ahead of the Christmas and New Year holidays. Actual demand for oil and refining activity in China in November increased compared to the same period last year, but other monthly figures indicated overall economic weakness.

Oil remains on track to record an annual loss, as expectations grow of an expanding surplus with increased production from the OPEC+ coalition and other producers, despite forecasts of slowing demand growth. Concerns about oversupply are beginning to surface in the key crude oil market in the Middle East, although geopolitical uncertainties have led to a slight increase in the risk premium.