(MENAFN- Trend News Agency) Oil prices climbed on Wednesday, paring losses from the previous
session, as investors jumped into more risky assets such as
commodities amid gains in broader equity markets and on signs of
renewed demand from top oil importer China, reports with reference
to .
Brent crude futures for December settlement rose 46 cents, or
0.5%, to $90.49 a barrel by 0455 GMT.
U.S. West Texas Intermediate crude for November delivery was at
$83.69 a barrel, up 87 cents, or 1.1%. WTI's front-month contract
expires on Thursday and the more active December contract was at
$82.89, up 82 cents, or 1.0%.
In the previous session, Brent fell by 1.7% and WTI fell by 3.1%
to their lowest in two weeks on reports of U.S. President Joe
Biden's plans to release more barrels from the Strategic Petroleum
Reserve (SPR).
Oil prices were also buoyed by better risk sentiment which was
lifted by upbeat U.S. corporate earnings and rising equity
markets.
'The small rebound in oil prices is more likely due to more
positive sentiment on the equity bourses and return of risk on
trades than industry fundamentals,' said Suvro Sarkar, lead energy
analyst at DBS Bank in Singapore.
Prices were also supported on signs of resurgent Chinese demand.
Private mega refiner Zhejiang Petrochemical Corp (ZPC) won
additional crude oil import quota for 2022 of 10 million tonnes and
state-run ChemChina received a further quota of 4.28 million
tonnes. That is equal to about 104 million barrels.
The pending European Union ban on Russian crude and oil products
and the output cut from the Organization of the Petroleum Exporting
Countries (OPEC) and other producers including Russia, a group
known as OPEC+, of 2 million barrels per day also kept prices
strong.
The OPEC+ cut and EU embargo will squeeze supply in an already
tight market. The EU's sanctions on Russian crude and oil products
will take effect in December and February, respectively.
'With EU ban on Russian crude looming in early December, we
would still be overall bullish than bearish on oil at current
levels,' DBS' Sarkar said.
To plug the gap, President Biden will announce a plan later on
Wednesday to sell off the remainder of his release from the SPR and
detail a strategy to refill the stockpile when prices drop, a
senior administration official said.
In December, the administration plans to sell 15 million barrels
of oil from its reserves, the final tranche of the 180 million
barrels release announced earlier this year, a senior U.S. official
said.
U.S. crude oil stockpiles fell by about 1.3 million barrels for
the week ended Oct. 14, according to market sources citing American
Petroleum Institute figures on Tuesday. Gasoline inventories
declined by about 2.2 million barrels while distillate stockpiles
dropped by 1.1 million, the sources said.
U.S. crude inventories were expected to have increased for a
second consecutive week, rising by 1.4 million barrels in the week
to Oct. 14, an extended Reuters poll showed on Tuesday.
Inventory data from the Energy Information Administration, the
statistical arm of the U.S. Department of Energy, is due at 10:30
a.m. (1430 GMT) on Wednesday.