Oil prices edge up on China demand recovery expectations

Pump jacks are silhouetted against the rising sun at an oilfield in Baku, January 24, 2013. (Reuters)

SULAIMANI (ESTA) — Oil prices edged up on Wednesday on expectations that easing COVID-19 restrictions in China will push up demand and as industry data showed drawdowns in U.S crude inventories.

Brent crude was up $1.37 at $113.3 a barrel at 0910 GMT, while U.S. West Texas Intermediate (WTI) crude climbed $1.79 to $114.2 a barrel, reversing some of the previous session’s losses.

The authorities allowed 864 of Shanghai’s financial institutions to resume work, sources said on Wednesday, a day after the Chinese city achieved a milestone of three consecutive days with no new COVID-19 cases outside quarantine zones, according to Reuters.

“Less awful news on China offers a nip in the tail in the form of much higher oil demand and prices, which is positive for producers, but harmful for consumer sentiment,” Reuters quoted Stephen Innes, managing partner at SPI Asset Management, as saying.

Raising supply concerns, U.S. crude and gasoline stocks fell last week, according to market sources who cited American Petroleum Institute figures on Tuesday, Reuters reported. Crude stocks fell by 2.4 million barrels for the week ended May 13, they said.

U.S. government data is due on Wednesday.

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