Oil settles mixed after hitting 7-week high on bright outlook for China

  • Brent and US crude at highest since early December
  • The G7 wants two price caps for Russian petroleum products
  • Indian crude imports hit 5-month high in December

NEW YORK, Jan 23 (Reuters) – Oil prices stabilized on Monday, falling as investors enjoyed a jump to a seven-week high on optimism about a possible recovery in demand from the main importer oil, China, as the economy recovered from pandemic lockdowns this year.

Brent crude stood 56 cents higher at $88.19 a barrel. The session high was $89.09 a barrel, the highest since Dec. 1. 1. U.S. West Texas Intermediate (WTI) crude settled 2 cents lower at $81.62 a barrel, from a session high of $82.64 a barrel, the highest since Dec. 21 . 5.

Prices pulled back late in the session as investors took profits, said Price Futures Group analyst Phil Flynn.

Still, the market wants to hold on to long positions in case Chinese growth picks up, said Sukrit Vijayakar, director of Mumbai-based energy consultancy Trifecta.

Data shows a strong recovery in China travel after COVID-19 restrictions eased, ANZ commodity analysts said in a note, noting road traffic congestion in the country’s 15 key cities country so far this month is up 22% year on year. since

Crude oil prices in many physical markets around the world started the year with a rally as China showed signs of additional buying and traders worried that sanctions against Russia could tighten supply.

“While the reopening (of China) itself will no doubt prove complicated, particularly over the festive period, early indications suggest that there has been an increase in activity, which means that the economy could perform better,” said OANDA analyst Craig Erlam.

Brent should return to a range between $90 and $100 as the oil market tightens, Erlam said.

Product demand boosted the oil market and refining margins, Flynn said. The 3-2-1 crack spread, an indicator of refining margins, rose to $42.18 a barrel on Monday, the highest since October.

The European Union and the Group of Seven (G7) coalition will cap the prices of Russian refined products from February 1. 5, in addition to the Russian crude price cap in place since December and an EU embargo on imports of Russian crude by sea.

The G7 agreed to postpone a review of Russia’s oil price cap level to March, a month later than originally planned, to allow time to assess the impact of the price cap on petroleum products.

India’s crude oil imports hit a five-month high in December, government data showed on Monday, as refiners stocked up on cut-price Russian fuel amid steadily rising consumption in the country.

Reporting by Stephanie Kelly in New York; additional reporting by Ron Bousso in London, Mohi Narayan in New Delhi and Sonali Paul in Melbourne Editing by David Goodman, David Gregorio and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

Stephanie Kelly

Thomson Reuters

New York-based correspondent covering the US crude market and member of the energy team since 2018 covering oil and fuel markets as well as federal renewable fuels policy.

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