© Reuters. Pumps work at the Kern River oil field in California, USA, in a photo from the Reuters archive.
SINGAPORE (Reuters) – It regained ground on Monday after falling more than $2 a barrel in the previous session as optimism about China lifting COVID-19 restrictions and a recovery in oil demand exceeded the fears of a global recession.
Crude oil futures were up 72 cents, or 0.9%, to 79.76 a barrel at 0103 GMT, while US West Texas Intermediate crude was $74.89 a barrel, up 60 cents, or 0.8%.
China, the world’s largest importer of crude oil and second largest oil consumer, is seeing the first of three expected waves of COVID-19 cases after Beijing eased restrictions on movement.
“Despite the surge in Covid cases, optimism from reopening and (Covid-related) policy easing is improving the outlook for oil demand,” said Tina Teng, analyst at CMC Markets.
China’s Caixin economic news agency reported on Friday that China plans to ramp up flights with a view to restoring the country’s average daily passenger flight volume to 70 percent of 2019 levels by Jan. 6.
China’s diesel and gasoline exports continued to grow in November, hitting their highest level in more than a year as refineries (TADAWUL:) scrambled to sell off their 2022 export quotas and sell off growing inventories.
Brent and West Texas Intermediate rose more than 3% last week as a pipeline from Canada to the United States remained closed as operator TC Energy focused on cleaning up an oil spill. The closure of the (TADAWUL:) pipeline carrying 622,000 barrels per day of Canadian crude to US refineries has supported US heavy crude prices.
Friday’s announcement by the US Department of Energy that it will begin buying back crude oil, in order to boost the Strategic Oil Reserve, also fueled expectations of higher prices.
This will be the first purchase by the United States since the release of a record 180 million barrels of storage this year.
(Prepared by Hassan Ammar for the Arab Bulletin)
