NEW YORK, Oct 20 (Reuters) – Oil prices rose more than 1% on Thursday on news that China is considering easing COVID-19 quarantine measures for visitors, raising hopes of increased energy demand from the world’s leading Oil importer strengthens.
Brent crude futures were up $1.30, or 1.4%, at $93.71 a barrel by 11:07 a.m. EDT (1507 GMT).
US West Texas Intermediate crude for November delivery, which expires Thursday, rose $1.76, or 2.1%, to $87.31 a barrel. WTI for December delivery rose $1.45, or 1.7%, to $85.97 a barrel.
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Beijing is considering reducing the quarantine period for visitors from 10 days to seven days, Bloomberg News reported on Thursday, citing people familiar with the matter. Continue reading
China, the world’s largest crude oil importer, has adhered to strict COVID restrictions this year, which has weighed heavily on business and economic activity and reduced demand for fuel.
“We’re having a bit of a rally from events in China,” said Bob Yawger, director of energy futures at Mizuho in New York. “That was seen as a positive demand indicator for the market.”
A looming European Union ban on Russian crude and oil products, as well as production cuts by the Organization of Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, have also supported prices.
OPEC+ agreed in early October to cut production by 2 million barrels a day.
Separately, US President Joe Biden on Wednesday announced a plan to sell the remainder of his release from the country’s Strategic Petroleum Reserve (SPR) by the end of the year, or 15 million barrels of oil, and begin to replenish the stock. while trying to dampen high gasoline prices ahead of the Nov. 8 midterm elections.
The announcement failed to ease oil prices, however, as official US data showed the SPR had fallen to its lowest level since mid-1984 last week, while commercial oil stocks unexpectedly fell.
“Yesterday’s failed attempt to cool oil prices is further evidence that the US has lost its grip on global oil markets,” said Stephen Brennock of PVM Oil.
Meanwhile, global demand for fuel remains uncertain. US economic activity has expanded slightly in recent weeks, although it has stagnated in some regions and contracted in some others, the Federal Reserve said on Wednesday in a report that showed companies were turning more pessimistic about the outlook.
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Reporting by Stephanie Kelly in New York; Additional reporting from Ahmad Ghaddar in London and Emily Chow in Singapore; Edited by Marguerita Choy and Kirsten Donovan
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