Oil prices edged up on Thursday, building on gains in the previous session as China’s demand outlook improved, though gains were limited ahead of upcoming inflation data from the United States.
Brent crude had risen 16 cents, or 0.2 percent, to $82.83 per barrel, while US West Texas Intermediate crude also rose 13 cents, or 0.2 percent, to $77.54 per barrel.
Both benchmarks rose 3 percent in Wednesday’s session, boosted by hopes for an improved global economic outlook and concern over the impact of sanctions on Russian crude output.
“China is speeding up stockpiles for crude oil ahead of the Lunar New Year holiday, as the demand outlook has been improved amid a U-turn in its COVID policy,” said Tina Teng, an analyst at CMC Markets.
Top oil importer China is reopening its economy after the end of strict COVID-19 curbs, boosting optimism that demand for fuel will grow in 2023.
It industrial output is expected to have grown by 3.6 percent in 2022 from the previous year, the Ministry of Industry and Information Technology said, despite production and logistics disruptions from COVID-19 curbs.
“There is continued optimism in the oil market fueled by China’s re-opening, and as Chinese New Year approaches, increased travels should support gasoline and jet fuel demand,” said Serena Huang, head of APAC analysis at Vortexa.
So far, China’s outbound flight bookings were at only 15 percent of pre-pandemic levels in the week after the country announced it would reopen its borders, despite a 192 percent jump from the same period last year, travel data firm ForwardKeys said on Thursday. – Reuters
