New York, Nov 7 (Reuters/GNA) – Oil prices rose on Monday to an over two-month high on news that China, the world’s top crude importer, could move toward reopening after years of strict COVID-19 restrictions.
Brent crude futures were up 57 cents to $99.14 a barrel by 11:34 a.m. EST (1434 GMT). It rose to a session high of $99.56 a barrel, highest since Aug. 31.
U.S. West Texas Intermediate crude rose by 74 cents to $93.35. It earlier rose 74 cents to a session high of $93.74 a barrel, highest since Aug. 30.
Chinese leaders are considering reopening after nearly three years of tough pandemic restrictions but are proceeding slowly and have set no timeline, the Wall Street Journal reported, citing sources.
“The market seems to be thinking that if China opens the economy, that would tighten supply significantly and put further upward pressure on prices,” said Phil Flynn, an analyst at Price Futures Group.
There have been mixed signals about China’s reopening. Both crude contracts dropped by more than $1 a barrel earlier in the session after Chinese health officials at the weekend reiterated their commitment to strict COVID containment measures.
Meanwhile, China’s imports and exports contracted unexpectedly in October, its crude oil imports rebounded to the highest level since May.
Adding price support, the U.S. dollar sank against the euro on Monday and sterling was supported by risk-on sentiment and a rally in European stock markets. A weakening dollar makes greenback-denominated oil less expensive for other currency holders, helping push prices higher.
Oil prices have also been underpinned by expectations of tighter supplies when the European Union’s embargo on Russia’s seaborne crude exports starts on Dec. 5, even though refineries worldwide are ramping up output.
U.S. oil refiners this quarter will run their plants at breakneck rates, near or above 90% of capacity. China’s largest private refiner Zhejiang Petroleum and Chemical Co (ZPC), meanwhile, is raising diesel output.
Kuwait Integrated Petroleum Industries Co (KIPIC) said on Sunday the first phase of its Al Zour refinery had started commercial operations, the KUNA state news agency reported.
GNA
Credit: Reuters