Oil soars as China considers easing COVID restrictions

China considers cutting quarantine time for visitors – report The looming EU ban on Russian oil, OPEC+ cuts backing US oil reserve sales plan cannot push prices

NEW YORK, Oct. 20 (Reuters) – Oil prices rose Thursday after news China is considering easing COVID-19 quarantine measures for visitors, spurring hopes of increased energy demand at the world’s largest oil importer.

Brent crude futures were up 6 cents to $92.47 a barrel at 12:58 a.m. EDT (1658 GMT).

US West Texas Intermediate crude for delivery in November, which expires on Thursday, rose 95 cents to $86.50 a barrel. The WTI for December delivery rose 30 cents to $84.82 a barrel.

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Beijing is considering reducing the quarantine period for visitors from ten days from seven days to seven days, Bloomberg news reported Thursday, citing people familiar with the matter. read more

“That’s seen as a positive demand indicator for the market,” said Bob Yawger, director of energy futures at Mizuho in New York.

China, the world’s largest crude oil importer, has adhered to strict COVID restrictions this year, which weighed heavily on business and economic activity, depressing fuel demand.

A looming European Union ban on Russian crude oil and oil products, as well as cuts in production by the Organization of Petroleum Exporting Countries and allies, including Russia, known as OPEC+, have also propped up prices.

OPEC+ reached an agreement in early October on a production cut of 2 million barrels per day.

Separately, US President Joe Biden announced on Wednesday a plan to sell off the remainder of his release from the Strategic Petroleum Reserve (SPR) by the end of the year, or 15 million barrels of oil, and begin replenishing supplies while he tries high gas prices ahead of midterm elections on November 8.

The announcement didn’t cause oil prices to fall, however, as official US data showed the SPR had fallen to its lowest level since mid-1984 last week, while commercial oil inventories fell unexpectedly.

Meanwhile, global fuel demand remains uncertain. US economic activity has grown modestly in recent weeks, although it has been flat in some regions and declining in a few others, the Federal Reserve said in a report Wednesday that showed companies becoming more pessimistic about the outlook.

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Reporting by Stephanie Kelly in New York; Additional reporting by Ahmad Ghaddar in London and Emily Chow in Singapore; Editing by Marguerita Choy, Kirsten Donovan and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

Stephanie Kelly

Thomson Reuters

A New York-based correspondent covering the US crude oil market and member of the energy team since 2018 for the oil and fuel markets and federal renewable fuel policies.

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