Oil prices firm on China demand optimism

Oil prices firm on China demand optimism

LONDON, Jan 26 (Reuters) – Oil prices rose 1% on Thursday on expectations that demand will strengthen as high oil importer China reopens its economic system and on information U.S. crude inventories have risen lower than anticipated.

Brent crude futures rose 78 cents, or 0.9%, to $86.90 a barrel by 1046 GMT. U.S. West Texas Intermediate (WTI) crude futures have been up 75 cents, or 0.9%, at $80.90.

“China’s reopening is supporting demand prospects,” mentioned UBS analyst Giovanni Staunovo.

“Also, market individuals are carefully monitoring the upcoming OPEC+ JMMC assembly and the EU embargo on refined merchandise.”

China has been easing stringent COVID-19 restrictions this month, with Beijing reopening its borders for the primary time in three years.

“(Commodity) markets are set to tighten considerably ought to the reopening in China – the world’s largest driver of commodity demand – be orderly, and … we anticipate situations to be ripe for commodity investor inflows,” MUFG analyst Ehsan Khoman mentioned.

Meanwhile, U.S. crude inventories edged up by 533,000 barrels to 448.5 million barrels within the week ending Jan. 20, the Energy Information Administration (EIA) mentioned.

That was wanting forecasts for a 1 million barrel rise, although the EIA says crude shares are at their highest since June 2021.

The OPEC+ ministerial panel assembly on Feb. 1 is more likely to endorse the oil producer group’s present output ranges, OPEC+ sources mentioned.

Global financial progress is forecast to barely transfer above 2% this 12 months, a Reuters ballot of economists confirmed, suggesting {that a} additional downgrade is feasible. That was at odds with widespread optimism in markets because the starting of the 12 months.

Reporting by Ahmad Ghaddar
Additional reporting by Jeslyn Lerh in Singapore
Editing by David Goodman

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