Crude oil started trading today with a gain on the back of expectations that China could start easing its Covid restrictions and on data from the American Petroleum Institute indicating a further drop in state crude oil inventories. -United.
China’s Covid lockdowns have been one of the big headwinds for oil prices, keeping a lid on any rally since the summer as one of the world’s biggest consumers pursues its zero-Covid policy.
Still, data on stock price movements this week reflect growing hopes that Beijing will soon begin easing restrictions, which would have a large positive effect on oil demand and, therefore, prices.
Meanwhile, API estimated U.S. crude oil inventories fell 6.53 million barrels last week, with gasoline inventories also down 2.64 million barrels, while Distillate stocks added a modest 865,000 barrels, according to the industry group.
Government data on crude oil and fuel inventories are due out later today.
On Tuesday, crude oil benchmarks Brent and WTI both gained about 2% on news from China but also a weaker U.S. dollar, after their first monthly gain since May as October proved cumulatively positive.
Analysts quoted by Reuters in a recent report also pointed to even higher prices, citing OPEC+ production cuts, record US exports and the possibility that the Biden administration will stop releasing crude from the strategic petroleum reserve.
Meanwhile, OPEC announced stable production rates through October despite an agreement to cut production by a modest 100,000 bpd, which was more symbolic than real with so many cartel members already falling short. of their quotas.
Russian production in October, however, was significantly lower than a year ago, at 9.9 million bpd. This compares to an OPEC+ quota of 11 million bpd.
By Irina Slav for Oilprice.com
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