Oil price stopped falling on news from China
2022.12.08 10:32
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Oil price stopped falling on news from China
Budrigannews.com – After a recent selloff, oil prices rose on optimism of increased demand from China and indications that the G7 price cap is delaying Russian crude exports.
Futures were up 3.6% at $74.62 a barrel at 09:00 ET (14:00 GMT), and the contract was up 2% to $78.72.
Wednesday marked the fourth session of negative trading for both contracts, which reached their lows for 2022.
China announced on Wednesday a widespread relaxation of its COVID-19 restrictions in the face of civil unrest over the stringent and prolonged nature of the restrictions and official case counts having dropped sharply in the last week.
China is the world’s largest crude importer, but its economy contracted by 3% in the first three quarters of this year, below the official target of 5%, as a result of strict COVID restrictions.
Premier Li Keqiang, as reported by state media CCTV on Thursday, stated that the country’s economic growth will continue to pick up pace as a result of the implementation of the recently announced anti-COVID adjustment measures.
According to Reuters, at least 20 oil tankers faced additional time in crossing to the Mediterranean from Russia’s Black Sea ports as a result of the additional scrutiny required following the G7 price cap. On the supply side, there are still delays to shipments through the Bosporus Strait.
More Turkey says it will continue blocking tankers
Any Russian oil cargo purchased for more than $60 per barrel cannot be insured by EU businesses under the terms of the mechanism.
Reuters reported on Thursday that the trading arm of Azerbaijan’s state oil company SOCAR has stopped buying Russian crude oil for its Turkish refinery in an effort to abide by Western sanctions.
Data from the show that U.S. crude inventories fell last week, but inventories rose, raising concerns about falling demand.
“EIA information show that U.S. business raw petroleum inventories dropped by one more 5.2MMbbls throughout the past week, following a tremendous 12.6MMbbls of draw over the former week,” as per experts at ING, in a note. ” A slowdown in exports is largely to blame for the drop in inventory withdrawals.
ING added, “At this point in the season, U.S. commercial crude oil inventory…now stands significantly below the 5-year average of around 451.9MMbbls.”
