- Brent, US crude, hit its highest level since early December
- G7 seeks two price caps for Russian oil products
- India’s crude oil imports hit a 5-month high in December
NEW YORK, Jan 23 (Portal) – Oil prices rose around 1% to a seven-week high on Monday, extending last week’s gains on an improved outlook thanks to an expected economic recovery in key oil importer China this year .
Brent crude was up $1.12, or 1.3%, at $88.75 a barrel as of 1:14 p.m. EST (1814 GMT). The session high was $89.09 a barrel, the highest since December 1st.
US West Texas Intermediate (WTI) crude was up 72 cents, or 0.9%, at $82.36. The session high was $82.64 a barrel, the highest since December 5.
Asian trade was slower due to the Lunar New Year holiday, but analysts said optimism about China’s reopening is likely to push oil prices higher.
Sukrit Vijayakar, director of Mumbai-based energy consultancy Trifecta, said the market wants to maintain long positions in case Chinese growth picks up again.
The data shows a solid increase in travel in China after COVID-19 curbs were eased, ANZ commodities analysts said in a note, noting that traffic congestion in the country’s 15 major cities has eased so far this month Up 22% over the same period last year.
Crude oil prices in many physical markets around the world started the year rallied as China showed signs of more buying and traders feared sanctions on Russia could limit supply.
“While reopening (China) itself will no doubt prove complicated, particularly during the holiday season, early signs suggest activity has picked up, meaning the economy could do better,” said Craig Erlam, analyst at OANDA .
Brent is expected to return to a range between $90 and $100 as the oil market picks up, Erlam said.
Demand for products has lifted the oil market and refining margins, according to Price Futures Group analyst Phil Flynn. The 3-2-1 crack spread, an indicator of refining margins, rose to $42.05 a barrel on Friday, the highest since October.
The coalition of the European Union and the Group of Seven (G7) will cap prices on Russian refined products from February 5, in addition to the price cap on Russian crude oil in place since December and an EU embargo on imports of Russian crude oil by sea .
The G7 have agreed to postpone a review of the level of the Russian oil price cap to March, a month later than originally planned, to allow time to assess the impact of the price cap on oil products.
In India, crude oil imports rose to a five-month high in December, government data showed on Monday as refiners stocked up on discounted Russian fuel amid steadily rising consumption in the country.
Reporting by Stephanie Kelly in New York; additional reporting by Ron Bousso in London, Mohi Narayan in New Delhi and Sonali Paul in Melbourne Editing by David Goodman, David Gregorio and Mark Potter
Our standards: The Trust Principles.
Stephanie Kelly