Oil prices rise amid possible fuel demand recovery in China

17 October 2022, 08:00 PM
Brent and WTI oil on the back of hopes for demand recovery in China (Photo:PASCAL ROSSIGNOL \ Reuters)

Brent and WTI oil on the back of hopes for demand recovery in China (Photo:PASCAL ROSSIGNOL \ Reuters)

Oil prices showed gains amid hopes of a recovery in fuel demand in China, after the Chinese government lifted liquidity measures to help its economy following the COVID-19 pandemic, the Reuters news agency reported on Oct. 17.

Reuters reports that this has given rise to hopes for an improvement in the forecast for fuel demand from the world's largest importer of crude oil.

Futures for Brent crude rose by 0.88% to $92.44 per barrel, resuming after falling by 6.4% last week. WTI oil rose to $86.33 per barrel.

Meanwhile, China’s central bank extended the maturity of medium-term loans, leaving inter-est rates unchanged for a second month on Oct. 17.

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Analysts believe that the full rollover is a signal that the central bank will continue its loose monetary policy.

China also pledged to significantly increase domestic energy supply capacity and strengthen risk controls for key commodities, including coal, oil, natural gas, and electricity.

In future, oil prices are expected to remain volatile as OPEC+ production cuts lead to supply cuts ahead of the EU embargo on Russian oil, the agency reports.

At the same time, a strong US dollar and further interest rate hikes by the U.S. Federal Re-serve are limiting price growth.

Earlier, the United States proposed limiting the price of Russian oil to $60 per barrel as part of sanctions against it for its unprovoked full-scale invasion of Ukraine This is likely to be enough to cut Moscow's energy revenues while ensuring profitable production.

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