© Reuters. FILE PHOTO: An aerial view shows the Idemitsu Kosan Co. oil facility in Ichihara, east of Tokyo, Japan, Nov. 12, 2021, in this photo by Kyodo.Mandatory Credit Union/via Reuters
NEW YORK (Reuters) – Oil prices rose on Monday on optimism that Chinese demand will see a significant recovery after positive signs that the coronavirus pandemic is fading in the hardest-hit regions.
EDT (1710 EDT) was up $1.34, or 1.2%, at $112.89 a barrel by 1342 GMT 12:10pm GMT, while U.S. West Texas Intermediate (WTI) crude was up 2.22 The dollar, or less than 0.1 percent, was at $112.71 a barrel.
Shanghai aims to fully reopen from June 1 and allow the city’s 25 million people to return to normal life, an official in Shanghai said on Monday, after the city announced that 15 of its 16 districts had been eliminated outside quarantine zones. ‘s case.
However, an estimated 46 cities in China are in lockdown, affecting shopping, factory output and energy use.
“We’re seeing a lot of signals that demand in the region will start to pick up, supporting higher prices,” said Bob Yawger, head of energy futures at Mizuho.
China’s processing volume fell 11% in April, with daily throughput at its lowest level since March 2020, due to an unexpected drop in industrial output.
U.S. gasoline futures hit another all-time high on Monday as falling inventories sparked supply concerns. [EIA/S]
“Oil prices will continue to be bullish, especially near-term contracts for WTI, as U.S. gasoline prices continue to rise amid weak European oil product imports,” said Kazuhiko Saito, chief analyst at Fuji Fuji Securities.
Oil prices also found some support as EU diplomats and officials expressed optimism about a deal on a phased embargo on Russian oil despite concerns about supplies in Eastern Europe.
Austrian Foreign Minister Alexander Schallenberg said on Monday that Austria expects the EU to agree on sanctions in the coming days.
German Foreign Minister Annalena Berbock said the EU was still days away from reaching a deal.
“Oil prices are expected to remain near current levels of $110 a barrel due to the EU’s planned ban on Russian oil and a slow increase in OPEC production,” said Naohiro Niimura, a partner at Market Risk Advisory.