Business

Oil prices climb on easing China Covid-19 curbs, concerns over US storm impact

Oil prices easing China

Oil prices easing China:  In three-week prices of oil reached highs as expectations for increased fuel demand were stoked by China’s most recent relaxation of COVID-19 limits and by persistent worries that winter storms throughout the United States are having an impact on energy supply.

By 0253 GMT, Brent crude was up 88 cents, or 1.1 percent, at $84.80 per barrel, while US West Texas Intermediate crude was up 88 cents, or 1.1 percent, at $80.44 per barrel. Earlier in the session, the two benchmarks reached their highest level since December 5.

WTI climbed 2.7pc on Friday, while Brent increased by 3.6pc. Both benchmarks experienced their highest weekly gains since October. The markets in the US and the UK stood closed on Monday due to the Christmas holiday.

The National Health Commission said that China will stop requiring entering travelers to undergo quarantine as of June 8.

This ends a policy that had been in effect since the pandemic began three years ago. The leading crude oil importer became more optimistic about rising demand as a result.
In response to this news, the dollar weakened on Tuesday.

Oil costs less for holders of other currencies when the dollar is lower, and

this typically indicates that investors are more willing to take on risk.

On Christmas Day, a deadly blizzard paralyzed Buffalo, New York, cutting off power to thousands of homes, locking motorists and emergency personnel in their cars, and adding to the toll from storms that had been chilling much of the country for days.

Airline cancellations caused by weather-related delays at airports around the US led to the cancellation of about 2,700 US flights as of Saturday afternoon.

On Friday,

bitter cold and strong winds curtailed energy production in the country and caused power outages,

raising the cost of electricity and heating.

According to Kazuhiko Saito, the chief analyst at Fujitomi Securities Co Ltd.,

“Fears of supply disruption from winter storms in the US drove purchasing,

however, activity was thin as many market participants were abroad on vacation.”

He added that this advantage may not last long as the US weather is expected to improved this week.

Worries over a probable Russian output drop also had an impact on gains. In response to price limitations,

Russia may reduce oil production by 5-7 percent in the first quarter of 2023, according to Deputy Prime Minister Alexander Novak, quoted by the RIA news agency on Friday.

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