Oil climbs on hopes of China’s fuel demand recovery

Oct 17 (Reuters) – Oil prices rose on Monday after China rolled back liquidity measures to help its pandemic-hit economy, raising hopes of an improving outlook for fuel demand from the top importer world of crude.

Brent crude futures were up 81 cents, or 0.88%, at $92.44 a barrel at 0642 GMT, recovering from a 6.4% drop last week. U.S. West Texas Intermediate crude was at $86.33 a barrel, up 72 cents, or 0.84%, after falling 7.6% last week.

China’s central bank on Monday rolled over maturing medium-term political loans while keeping the interest rate unchanged for a second month.

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Analysts said the full renewal is a signal that the central bank will continue to maintain loose monetary policy. Read more

The country has also pledged to significantly increase domestic energy supply capacity and strengthen risk controls in key commodities including coal, oil and gas and electricity, a senior official said on Monday. head of the National Energy Administration.

China will further increase its spare capacity for key commodities, another state official told a press conference in Beijing. Read more

Oil found support from a combination of factors, including Chinese President Xi Jinping’s comments to the Party Congress that reassured accommodative policies for the economy, a positive sign for the demand outlook, Tina said. Teng, analyst at CMC Markets. Read more

China is expected to release trade and economic data this week. Although its third-quarter GDP growth may rebound from the previous quarter, President Xi’s tough COVID-19 policy puts the world’s second-largest economy facing what will most likely be its worst year in nearly half a year. -century. Read more

Going forward, oil prices are likely to remain volatile as OPEC+ production cuts will tighten supplies ahead of the European Union’s embargo on Russian oil, while a strong US dollar and further rises interest rates from the US Federal Reserve limit price gains.

St. Louis Fed President James Bullard said on Friday that inflation had become “pernicious” and hard to stop, and warranted continued “frontloading” with larger three-quarter-point increases. percentage. Read more

Member states of the Organization of Produce Exporting Countries and their allies, including Russia, lined up on Sunday to endorse the steep production cuts agreed to this month after the White House escalated a war of words with the Saudi Arabia has accused Riyadh of coercing other nations to back the move. Read more

OPEC+ pledged on October 5 to cut production by 2 million barrels per day, which will lead to an actual drop of around 1 million bpd, with some members already producing below their targets.

Despite this, Saudi Arabia, the leading exporter, will maintain its exports to major Asian markets in November.

“Tightening oil and petroleum product inventories as well as looming supply risks are expected to keep prices volatile,” analysts at ANZ Research said in a note.

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Reporting by Mohi Narayan in New Delhi and Florence Tan in Singapore; Editing by Gerry Doyle

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