Global crude oil report: Prices rise on the hopes of recovery of Chinese demand

1 Dec 2022 , 08:41 AM

Early Asian trading on Thursday saw a sharp increase in oil prices, driven by signals of tighter supply and hope for a resurgence in Chinese demand.

U.S. West Texas Intermediate crude futures increased by 16 cents, or 0.2%, to $80.71 and Brent crude prices increased by 5 cents, or 0.06%, to $87.02 per barrel.

A day after protesters in southern Guangzhou battled with police amid a string of demonstrations against the strictest coronavirus regulations in the world, the enormous Chinese cities of Guangzhou and Chongqing announced an easing of COVID limitations on Wednesday.

However, official PMI data released on Wednesday indicated that Chinese company activity continued to decline in November, heightening concerns for the upcoming year.

According to the Energy Information Administration, U.S. crude oil stocks fell by about 13 million barrels in the week ending November 25, the most since 2019. The EIA reported that U.S. crude oil production increased to more over 12 million barrels per day, the highest level since before the coronavirus outbreak began.

In order to maintain oil prices, U.S. Federal Reserve Chair Jerome Powell stated on Wednesday that it was necessary to decrease the rate of upcoming interest rate increases.

Gains are effectively capped by the OPEC+ agreement to conduct its meeting on December 4, according to a Reuters report on Wednesday.

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