Oil rebounds on China demand concerns

FE Team | Published: April 26, 2022 22:34:35

LONDON, Apr 26 (Reuters): Oil prices rose modestly in volatile trading on Tuesday as the market weighed concerns over Russian supply and Chinese demand.
Brent crude futures were up 41 cents, or 0.4 per cent, at $102.73 a barrel at 1117 GMT, while US West Texas Intermediate contracts were up 18 cents, or 0.2 per cent, at $98.72 per barrel.
Both contracts had settled down around 4 per cent on Monday.
Demand concerns in China, the world's largest crude oil importer, added downward pressure on Tuesday. China's capital Beijing has expanded its COVID-19 mass testing to much of the city of nearly 22 million, as the population braced for an imminent lockdown similar to Shanghai's stringent curbs.
But both oil contracts rose over $1 a barrel earlier in the session following a statement from the People's Bank of China that it will step up monetary policy support to the real economy.
"I still expect more policy support, but not the flood-like policy deluge the markets have been hoping for, which could leave oil markets adrift over the short term, looking to the US summer driving season and EU sanctions for support," Stephen Innes of SPI Asset Management said in a note.
The prospect of supply tightness in the physical market related to the phasing out of Russian oil provided price support.
The parliamentary parties of Germany's ruling coalition have called on the government to push ahead with a plan to phase out Russian oil and gas imports "as soon as possible".
But analysts said the release of oil from emergency reserves had eased concerns over tight supply.