Storage tanks are seen at the Petroineos Ineos oil refinery in Lavera, France, March 29, 2022. REUTERS/Benoit Tessier
LONDON – Oil prices rebounded Tuesday in volatile trading as the market weighed concerns over Russian supply and Chinese demand.
Brent crude futures were up $1.26, or 1.2%, to $103.58 a barrel by 1355 GMT. US West Texas Intermediate contracts were up $1.14, or 1.2%, to $99.68.
Brent and WTI had settled about 4% on Monday and hit respective lows of $101.08 and $97.06 a barrel on Tuesday, pressured by concerns over demand in China, the world’s largest crude oil importer.
The Chinese capital Beijing has extended its mass COVID-19 testing to much of the city of nearly 22 million as the population prepares for a lockdown akin to the strict curbs in Shanghai. Continue reading
But Brent was up $2/barrel early in the session after the People’s Bank of China said it would beef up monetary support for the real economy.
The prospect of a supply shortage in the physical market related to the Russian oil spill also added to bullish sentiment.
Germany hopes to be able to replace all oil supplies from Russia within a few days, Economics Minister Robert Habeck said on Tuesday. Continue reading
Analysts said the release of oil from emergency reserves has to some extent eased concerns about a shortage of supplies.
“Focus has shifted to the demand side of the equation and worries about ongoing supply disruptions have been significantly eased by the release of 240 million barrels of SPR oil by IEA members and by alleged, albeit somewhat covert, trading in Russian oil,” it said he Tamas Varga from Oil Broker PVM.
In a bearish signal for oil markets, five analysts polled by Reuters estimated US crude inventories rose an average of 2.2 million barrels in the week ended April 22.
The survey was conducted ahead of the release of the American Petroleum Institute’s inventory report Tuesday at 4:30 p.m. EDT (2030 GMT). Official data from the government’s Energy Information Administration will be released on Wednesday.
Separately, the CPC pipeline and Black Sea terminal, which transport about 80% of Kazakh crude exports, returned to full capacity on April 23 after several weeks of operating at half capacity due to storm-damaged jetties.
Additional reporting by Mohi Narayan in New Delhi and Liz Hampton in Denver; Edited by Louise Heavens and David Goodman