Oil Rises On Rebounding Chinese Demand, Geopolitical Risks
Brent crude futures were up 70 cents, or 0.78 percent, at $90.53 a barrel.
London:
Oil prices rose on Thursday as prospects for increased Chinese demand and heightened geopolitical risks overshadowed recession fears after the central bank, including the Bank of England, raised interest rates.
Brent crude futures were up 70 cents, or 0.78 percent, at $90.53 a barrel by 1054 GMT, while U.S. West Texas Intermediate (WTI) crude was up 71 cents, or 86 percent, at $83.65.
Prices rose more than $1 earlier in the session on news that demand for crude oil in China, the world’s biggest oil importer, was picking up, dampened by tough COVID-19 restrictions.
At least three Chinese state-owned oil refineries and one privately-run megarefinery are considering increasing runs by 10 percent from September to October, given strong demand and a possible increase in fuel exports in the fourth quarter. People familiar with the matter said.
Meanwhile, Russia on Thursday went ahead with its biggest recruitment drive since World War II, raising fears that an escalation of the war in Ukraine could further damage supplies.
“[Russian President Vladimir Putin’s] Tamas Varga, oil analyst at London brokerage PVM Oil Associates, said the often irrational actions and reactions will keep the market volatile and violent at times.
Keeping a cap on prices, the Bank of England raised its key interest rate by 50 basis points to 2.25% and said it would “necessarily, forcefully” respond to inflation despite the economy entering recession. “Give” will continue.
After the Federal Reserve’s hefty 75bps hike on Wednesday, rate hikes from the Swiss National Bank, Norges Bank and Indonesia’s central bank also came thick and fast, with further hikes expected later in the day from the South African Reserve Bank. Is.
“This just goes to show how synchronized this current period of austerity is,” Deutsche Bank said.
The Fed also signaled on Wednesday that US borrowing costs would continue to rise this year, in a move that sent Brent and WTI to two-week lows.
Further pressure after stock construction. U.S. crude inventories rose 1.1 million barrels in the week to 430.8 million barrels on Sept. 16, below analysts’ expectations in a Reuters poll for a 2.2 million barrel increase.
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