Declining Omicron cases in Shanghai boost hopes for rising oil demand
Oil prices rose on Thursday driven by signs that the world’s second-largest oil-consuming country China’s virus outbreak could be easing, raising expectations of stronger demand.
International benchmark Brent crude was trading at $110.19 per barrel at 0625 GMT for a 0.99% increase after closing the previous session at $109.11 a barrel.
American benchmark West Texas Intermediate (WTI) was at $107.67 per barrel at the same time for a 0.29% fall after the previous session closed at $107.99 a barrel.
China’s strict COVID-19 measures to curb omicron-driven outbreaks, particularly in the financial hub Shanghai, have taken a toll on the world’s second-largest economy.
Currently declining cases in Shanghai prompted hopes for better oil demand in the country in support of higher oil prices.
US commercial crude oil inventories decreased by 0.8% during the week ending May 13,according to data released by the Energy Information Administration (EIA) on Wednesday.
Inventories fell by 3.4 million barrels to 424.2 million barrels, against the market expectation of a rise of 1.5 million barrels.
The European Commission issued new guidance on Tuesday on how EU companies can pay for Russian gas in rubles without violating the bloc’s sanctions.
On Wednesday Von der Leyen unveiled a €300 billion ($315 billion) plan to end Europe’s reliance on Russian energy. She outlined a three-step plan, called Repower EU, which focuses on the demand side, supply-side, and accelerating the clean energy transition.
The demand side refers to saving energy, while on the supply side the EU needs to “diversify away from Russia for fossil fuels and towards other reliable trustworthy suppliers and the most important part, accelerating the clean energy transition. So massive investment in renewable energy,” she said.