LONDON: Tuesday’s tumultuous trade saw oil prices rise as investors weighed fears over Russian production against Chinese demand.
As of 1355 GMT, Brent oil futures were up 1.2% at $103.58 a barrel. The price of U.S. West Texas Intermediate crude oil rose by $1.14 cents, or 1.2 per cent, to $99.68 a barrel.
Pressured by concerns over demand in China, the world’s top crude oil importer, Brent and WTI had both finished almost 4% down on Monday and hit respective lows of $101.08 and $97.06 a barrel on Tuesday.
To prepare for a shutdown comparable to Shanghai’s, the Chinese capital of Beijing has expanded its COVID-19 mass testing to cover much of the city’s 22 million residents.
Crude oil prices jumped earlier in the session by $2 per barrel after the People’s Bank of China stated that it will increase assistance for the real economy through monetary policy.
The threat of a shortage of physical oil because of the phase-out of Russian oil has also contributed to the optimistic feeling in the market.
According to Economy Minister Robert Habeck, Germany wants to replace all Russian oil exports over the next few days.
The release of oil from emergency stockpiles, according to analysts, has relieved supply concerns to some degree.
Tamas Varga, an oil broker at PVM, stated that “the focus has turned to the demand side of the equation and fears about lengthy supply interruptions have substantially been eased,” by the release of SPR oil by IEA members and the “ostensible, albeit somewhat veiled, dealing in Russian oil.”
According to five Reuters surveyed oil analysts, US crude stocks rose by an average of 2.2 million barrels in the week ending April 22. This is a gloomy indicator for oil markets.
Before the American Petroleum Institute’s inventory report is released on Tuesday at 4:30 p.m. EDT (2030 GMT), a survey was conducted to gauge public opinion. Energy Information Administration figures are scheduled to be released on Wednesday.
About 80 percent of Kazakhstan’s oil exports are sent through the CPC pipeline and the Black Sea terminal, which reopened to full capacity on April 23 after functioning at half capacity due to storm-damaged mooring stations for many weeks.