OIL prices have risen amid signs that the Chinese economy is recovering following the slump triggered by the coronavirus crisis.

Brent crude traded up $0.70 per barrel at $45.10 yesterday afternoon, when shares in Royal Dutch Shell and BP were up around two per cent and 3% respectively on the day.

The crude price rise followed indications that activity in the key manufacturing sector in China is returning to levels not seen since before the Covid-19 coronavirus pandemic. Consumer spending appears to be on the rise.

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Developments in China add to evidence that moves to ease coronavirus lockdowns around the world are fuelling recovery around the world.

The chief executive of the giant Saudi Aramco, Amin Nasser, said yesterday: “We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies.”

At the weekend Mr Nasser told reporters that demand for gasoline and diesel in China had almost returned to pre-coronavirus level.

Brent crude fell to an 18-year low of £15.98/bbl in April from around $70/bbl in January.

It has recovered ground following the easing of lockdowns and the record cuts in production made by members of the Opec + grouping of exporters to support the market.

Saud Arabia is a leading member of the group.

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However, the partial recovery in the Brent crude price may not be enough to provide much of a boost to activity in the North Sea. A range of firms have slashed spending and jobs in response to the fall in prices this year.

Analysts have warned that a fresh spike in coronavirus cases could send crude prices tumbling again. Tensions between the US and China are weighing on market sentiment.

The US benchmark crude, West Texas Intermediate, sold for $42.08/bbl yesterday afternoon, up $0.86/bbl on the day.

The WTI price turned negative briefly in April amid concern that storage capacity would be exhausted.

The producer price index fell 2.4 per cent annually in China in July, compared with a fall of 3% in June. Analysts polled by Reuters expected prices to fall by 2.5%.

The consumer price index rose at the fastest rates in three months in July, 2.7%, compared with 2.5% in June.