(MENAFN- Trend News Agency)
Oil prices rose on Tuesday on an expected demand recovery in
China as the world's second-biggest economy relaxes tough COVID-19
curbs, and on doubts that a higher output target by OPEC+ producers
would ease tight supply, Trend reports with reference to Reuters .
Brent crude futures were up 76 cents, or 0.6%, at $120.27 barrel
at 0413 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up 83
cents, or 0.7%, at $119.33 a barrel. The benchmark hit a
three-month high of $120.99 on Monday.
Beijing and commercial hub Shanghai have been returning to
normal in recent days after two months of painful lockdowns to stem
outbreaks of the Omicron variant. Traffic bans were lifted and
restaurants were opened for dine-in service on Monday in most parts
'We could see a surge in fuel demand with cars back on roads in
the major cities, and ports gradually returning to normal operation
in China,' said Tina Teng, an analyst at CMC Markets.
Top oil exporter Saudi Arabia raised the July official selling
price (OSP) for its flagship Arab light crude to Asia by $2.10 from
June to a $6.50 premium over Oman/Dubai quotes, just off an
all-time peak recorded in May when prices hit highs due to worries
of disruptions in Russian supplies.
Last week, the Organization of the Petroleum Exporting Countries
(OPEC) and allies, together known as OPEC+, decided to boost output
for July and August by 648,000 barrels per day, or 50% more than
The increased target was spread across all OPEC+ members.
However, many members have little room to ramp up output, including
Russia, which faces Western sanctions.
'While the new increased monthly targets continue to be driven
by proportional contributions from all participants (including
Russia), it is unrealistic to expect an increase close to the
headline figure,' said Stephen Innes, managing partner at SPI Asset
Management, in a note.
Elsewhere, U.S. crude inventories likely fell last week, while
gasoline and distillate stockpiles were seen up, a preliminary
Reuters poll showed on Monday.
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