Oil prices rise for the second week
2022.12.28 00:30
Oil prices rise for the second week
Budrigannews.com – Despite concerns about a recession and restarts at some U.S. energy plants that were shut down by winter storms, gains in oil prices were limited on Wednesday on hopes of a recovery in fuel demand as China continues to ease its COVID-19 restrictions.
By 0406 GMT, futures for February delivery had increased by 9 cents, or 0.1%, to $84.42 a barrel. climbed 0.1 percent, or 10 cents, to $79.63 per barrel. In the midst of the hopeful market mind-set, the two benchmarks hit their most significant level in three weeks on Tuesday.
China, the world’s second-largest economy, is moving toward reopening its borders next month after three years of stringent restrictions on movement and businesses to prevent the spread of COVID. The hopes for a boost in demand for fuel come as China, the top crude oil importer, prepares to do so.
As the country moves toward treating the virus as endemic, an increase in COVID-19 infections put a lot of pressure on Chinese hospitals.
Claudio Galimberti, senior vice-president at Rystad Energy, stated that the most recent COVID-19 policy easing in China will have a short-term positive effect, particularly on international aviation.
“Yet, to get to a full standardization of China’s interest we should stand by two additional months,” he added.
According to a decree issued by President Vladimir Putin, news that Russia intends to prohibit oil sales to countries that abide by a G7 price cap imposed on Dec. 5 also helped boost prices.
However, according to Leon Li, an analyst at CMC Markets, “while a Russian ban on oil sales would cut supply, this would be offset by lower demand due to a potential global economic recession next year.”
On Tuesday, oil refiners in the United States were working to reopen a dozen facilities that had been shut down by the deep freeze. In some cases, this recovery will last into January.
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An Arctic blast has lowered temperatures well below freezing, halting oil and gas production from Texas and North Dakota.
A preliminary Reuters poll revealed on Monday that U.S. crude oil stocks were down 1.6 million barrels and distillate inventories were down as well.
Industry bunch American Petrol Foundation is because of delivery information on U.S. unrefined inventories at 4.30 p.m. EDT (2130 GMT) on Wednesday. At 10.30 a.m. (1330 GMT) on Thursday, the Energy Information Administration, the United States Department of Energy’s statistical arm, will release its own figures.
