Oil Up on Demand Recovery Expections in China
2022.06.07 07:06
By Zhang Mengying
Investing.com – Oil was up on Tuesday morning in Asia over expectations of demand recovery in China and doubts about higher output targets from the Organization of the Petroleum Exporting Countries and allies (OPEC+).
Brent oil futures rose 0.62% to $120.25 by 11:58 PM ET (3:58 AM GMT). Crude oil WTI futures jumped 0.71% to $119.34, the benchmark hit a three-month high of $120.99 on Monday.
Easing travel restrictions in China is likely to boost oil demand in the coming weeks, ANZ Research analysts said in a note.
Beijing and the commercial hub Shanghai are easing COVID-19 curbs and allowing more mobility. Beijing has reopened restaurants and cinemas in most parts.
Top oil exporter Saudi Arabia raised July’s official selling price to Asia by $2.10 from June for its flagship Arab Light crude, just off an all-time peak recorded in May.
The OPEC+ decided last week to increase output for July and August by 648,000 barrels per day, or 50% more than previously planned. However, not all members could ramp up output, including Russia, which faces Western sanctions.
“While the new increased monthly targets continue to be driven by proportional contributions from all participants (including Russia), it is unrealistic to expect an increase close to the headline figure,” SPI Asset Management managing partner Stephen Innes said in a note.
Investors now await U.S. crude supply data from the American Petroleum Institute, due later in the day.
