Oil prices rose on Wednesday amid expectations that easing COVID-19 restrictions in China will push up demand, as industry data showed declines in U.S. crude oil inventories.
Brent oil rose 23 cents, or 0.2 percent, to $ 112.16 per barrel. barrel at 0633 GMT, while US West Texas Intermediate (WTI)
Crude oil rose 71 cents, or 0.6 percent, to $ 113.11 per barrel. barrel, reversing some of the losses from the previous session.
Authorities allowed 864 of Shanghai’s financial institutions to resume work, sources said Wednesday, a day after the Chinese city reached a three-day milestone in a row with no new COVID-19 cases outside quarantine zones.
“Less terrible news about China gives a germ in the tail in terms of much higher oil demand and prices, which is positive for producers but detrimental to consumer sentiment,” Stephen Innes, managing partner at SPI Asset Management, wrote in a note. .
That raises concerns about supply, and U.S. crude oil and gasoline stocks fell last week, according to market sources, citing figures from the American Petroleum Institute on Tuesday. Crude oil stocks fell by 2.4 million barrels in the week ending May 13, they said.
Data from the US government comes on Wednesday.
“Rising diesel and distillate prices coupled with tight crude oil stocks support WTI, and I think the situation will limit the downside from here in oil prices over the next few sessions,” said OANDA senior analyst Jeffrey Halley.
But prices could still come under some pressure after reports that the US allowed Chevron Corp to negotiate oil licenses with Venezuela’s national producer, and temporarily lift a US ban on such talks, which could lead to more crude oil hitting the market, ANZ said. Research analysts.
The European Union’s failure on Monday to persuade Hungary to lift its veto on a proposed embargo on Russian oil could also weigh heavily, although some diplomats expect agreement on a step-by-step ban at a summit in late May.
As for the economic outlook, US Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank would screw up interest rates as high as necessary to stifle inflation, which he said threatened the foundations of the economy.