Singapore, Jan. 12 (BNA): Oil prices rose on Thursday, benefiting from gains from the previous session as the demand outlook improved in China, although gains were limited ahead of inflation data from the United States.
And by 0442 GMT, Brent crude rose 16 cents, or 0.2%, to $82.83 a barrel, while US West Texas Intermediate crude also rose 13 cents, or 0.2%, to $77.54 a barrel, according to Reuters reports.
Both benchmarks rose 3% in Wednesday’s session, boosted by hopes for an improved global economic outlook and concern about the impact of sanctions on Russian crude production.
“China is accelerating crude oil inventories ahead of the Lunar New Year holiday, as its demand outlook has improved amid a shift in its COVID policy,” said Tina Ting, an analyst at CMC Markets.
China, the largest oil importer, is reopening its economy after the end of strict restrictions on the spread of the Corona virus, which strengthens optimism that demand for fuel will grow in 2023.
The Ministry of Industry and Information Technology said that industrial output is expected to grow 3.6% in 2022 from the previous year, despite the disruption to production and logistics from COVID-19 restrictions.
“There is continued optimism in the oil market fueled by China’s reopening, and as the Chinese New Year approaches, increased flights should support demand for gasoline and jet fuel,” said Serena Huang, head of APAC analysis at Vortexa.
Outbound flight bookings in China reached just 15% of pre-pandemic levels in the week after the country announced it would reopen its borders, travel data firm ForwardKeys said on Thursday, despite a 192% jump from the same period last year.
Ting of CMC Market added that the upcoming US inflation data is a major risk factor for oil. This leads traders to exercise caution ahead of the data release on Thursday.
Economists expect the rise in core consumer prices in the US to slow to an annualized pace of 5.7% in December, from 6% in the previous month. On a monthly basis, the general inflation rate is expected to reach zero.
In addition, the market is preparing for additional restrictions targeting sales of Russian fuel products set to take effect in February as the European Union continues to work towards further sanctions against Moscow over its invasion of Ukraine.
The US Energy Information Administration said the EU ban on seaborne imports of petroleum products from Russia on February 5 could be more complex than the EU ban on seaborne imports of petroleum products from Russia in December.
The international price cap imposed on sales of Russian crude came into effect on December 5th.