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SINGAPORE – Oil prices rose on Wednesday in hopes of recovering demand in China as the country slowly eased some of its stringent COVID-19 controls.
Brent crude futures rose 48 cents, or 0.4%, to 2 112.41 a barrel at 0410 GMT, while US West Texas Intermediate (WTI) crude futures rose 93 cents, or 0.8%, to 3 113.33 a barrel, after some losses. By%
Shanghai on Tuesday achieved the long-awaited milestone of three days in a row with no new COVID-19 cases outside the quarantine zone and plans to end a more than six-week lockdown on Monday.
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“In the near future, less-than-terrible news from China pushes the tail in the form of much higher oil demand and prices, which is positive for producers, but detrimental to consumer sentiment,” Stephen Ines, managing partner at SPI Asset Management, said in a client note.
U.S. crude and gasoline stocks fell last week, market sources said, citing figures from the American Petroleum Institute on Tuesday. The U.S. government has information on Wednesday.
OANDA senior analyst Jeffrey Haley said: “Rising diesel and distillate prices, along with tight crude stocks, are supporting WTI and I believe the situation will limit oil prices to the bottom in the next few sessions.”
However, as the United States allows Chevron Corporation to negotiate oil licenses with Venezuelan national producers, prices remain under pressure despite the lifting of US sanctions on such talks, analysts at ANZ Research said in a client note on Wednesday.
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“The proposed changes could eventually hit the market with more crude oil.”
The European Union’s failure on Monday to lift its veto on a proposed Russian oil embargo was a major blow to the market. But some diplomats have now pointed to a May 30-31 summit as a moment of agreement on phased sanctions.
In the United States, Federal Reserve Chairman Jerome Powell on Tuesday promised that the central bank would raise interest rates as needed to stem the tide of inflation, which he said undermined the economy. (Reporting by Isabel Wells; Editing by Christopher Cushing and Bradley Parrett)