Global oil prices climbed to their highest in three weeks on Tuesday as the world’s biggest crude importer, China, announced it was ending some of its most stringent Covid curbs, spurring hopes of a fuel demand recovery.
International benchmark Brent crude was up 0.55%, to $84.38 a barrel at 09:55 GMT while US West Texas Intermediate crude rose to as high as $80. Both benchmarks hit their highest price since December 5.
The price jump comes as China’s National Health Commission announced on Monday it would stop requiring inbound travelers to go into quarantine, starting from January 8. The restriction has been in place since the start of the pandemic.
“This is certainly something that traders and investors have been hoping for,” chief market analyst at Avatrade, Naeem Aslam, was quoted as saying by Reuters.
Experts also say that concerns over a possible production cut by Russia and worries over supply disruption in the United States due to winter storms were pushing oil prices higher.
Moscow might cut oil output by 500,000-700,000 barrels a day in early 2023 in response to Western price caps, Russia’s Deputy Prime Minister Aleksandr Novak said on Friday. Russia is the world’s third largest oil producer and the curbs would equate to roughly 5-6% of the country’s daily output. This could tighten the global energy market as demand in China is forecast to rebound.
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