Oil prices rose at the start of the week after falling more than $2 per barrel the previous session, thanks to a vow from China to restart consumption as Covid Zero is phased out and a proposal from the US administration to begin refilling the country’s strategic crude stockpiles.
Brent crude futures rose US$1.00, or 1.27%, to US$80.04 a barrel by 9.51 A.M. (Thai time) while US West Texas Intermediate crude was at US$75.21 a barrel, up US$0.92, or 1.24%.
With Beijing’s loosening of travel restrictions, the world’s largest crude oil importer and second-largest oil consumer is seeing the first of three waves of Covid-19 cases.
Oil demand is expected to rise despite a rise in Covid cases, according to CMC Markets analyst Tina Teng.
China’s exports of diesel and gasoline hit a record high in November, surpassing the previous record set a year prior, as refineries raced to meet their 2022 export quotas and get rid of building stockpiles.
The US Energy Department’s Friday statement that it will resume acquiring crude oil for the Strategic Petroleum Reserve added fuel to the fire of rising expectations.
This is the first time the United States has made a purchase since the record-breaking release of 180 million barrels from the reserve earlier this year.