Oil rose for a second session as China’s new crude import quotas helped cut recent pessimism over demand.
(Bloomberg) — Oil rose for a second session as China’s new crude import quotas helped cut recent pessimism over demand.
Brent crude topped $75 a barrel, while West Texas Intermediate hit $70. The large batch of Chinese quotas added to an improved outlook for consumption in the world’s second-largest economy, a day after Beijing was said to be considering a broad range of measures to revive a flagging recovery.
Crude has been largely range-bound since the start of May, as stubbornly high Russian supplies and concern about global demand counteract Saudi-led OPEC+ efforts to curb production. JPMorgan Chase & Co. became the latest oil bull to cut its forecast on Wednesday, with the bank saying OPEC+ action will no longer balance markets this year.
“I absolutely don’t buy into this argument that China’s not reopening,” Amrita Sen, chief oil analyst at Energy Aspects said in a Bloomberg TV interview. “There’s a huge disconnect between the data that’s been coming in, and forecasts, versus prices.”
World oil markets may tighten “significantly” over the next few months as China’s fuel consumption rebounds from the pandemic amid OPEC+ curbs, the International Energy Agency said in a report Wednesday.
The industry-funded American Petroleum Institute reported US nationwide crude inventories expanded by 1 million barrels last week. Gasoline and distillate stockpiles, and supplies at the Cushing, Oklahoma storage hub also rose. Official data is due later Wednesday.
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