Oil prices remain firm as China considers easing Covid-19 restrictions
Oil prices have risen slightly on both major benchmarks, amid reports China is considering easing Covid-19 quarantine measures for overseas visitors.
This has raised the prospect of an uptick in demand from the world’s largest oil importer.
The Chinese government is considering cutting the quarantine period for visitors to seven days from 10 days, according to Bloomberg.
Brent Crude was up 0.13 per cent to $92.53 per barrel while WTI Crude enjoyed a 1.11 per cent boost to $86.50 per barrel.
The gradual increase reflects the growing expectations of a recession across global markets, which continue to weigh down prices after a historic rally earlier this year.
Despite other countries easing or completely removing restrictions, China has stuck to strict COVID curbs this year, which weighed heavily on business and economic activity, lowering demand for fuel.
There is the possibility of a more pronounced rise in prices when the European Union ban on Russian crude and oil products kicks in later this year.
Meanwhile, OPEC+’s pledged output cut of 2m barrels per day begins in early November, which could further raise prices.
Separately, US President Joe Biden has announced plans yesterday to sell off the rest of his release from the nation’s Strategic Petroleum Reserve by the end of the year.
This represents around 15m barrels of oil, with the White House eager to reduce the cost of living ahead of key mid-term elections next month.
Craig Erlam, senior market analyst at OANDA argued this reflect the US’ declining influence on global oil markets – as prices failed to drop despite the pledged sell-off.
He explained: “Oil prices are higher on Thursday which comes after President Joe Biden confirmed the release of the final 15 million barrels from the SPR, as part of the 180 million previously agreed, and warned more could follow.
“That was already priced into the markets though and the price has fallen quite heavily over the last week and a half. Brent seems to now be settling into a new range, perhaps between $90 and $100, a level most may be relatively comfortable with.”