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Steady Oil After a Sharp Fall; Focus On China’s Growth – By ASC


Oil prices rebounded as concerns over China’s fuel demand were eased by the central bank’s pledge to support economies affected by the renewed COVID-19 sanctions.

China will maintain reasonably sufficient liquidity in financial markets, the People’s Bank of China said

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China will maintain reasonably sufficient liquidity in financial markets, the People’s Bank of China said

Oil prices rebounded on Tuesday, stabilizing after a sharp fall of 4% in the previous session, as concerns over China’s fuel demand were eased by the central bank’s pledge to support the economy hit by the renewed COVID-19 sanctions. Brent crude futures rose 59 cents, or 0.58%, at $ 102.91 a barrel after rising to $ 103.93 earlier in the session. The US West Texas Intermediate contract was up 34 cents, or 0.35%, at $ 98.88 a barrel at 0658 GMT after rising to $ 99.82 a barrel in early trading. Both contracts were settled around 4% lower on Monday, with Brent falling as much as $ 7 a barrel in the session and WTI declining about $ 6 a barrel.

China will maintain reasonable liquidity in financial markets, the People’s Bank of China said in a statement on Tuesday, a day after the central bank announced cuts to the bank’s foreign exchange reserves ratio to support the economy.

“I still expect more policy support, but not a policy flood like the market expected flood, which could cause the oil market to drift in the short term, looking at the US summer driving season and EU sanctions for support,” Stephen Innes of SPI Asset Management said in note.

The Beijing city government expanded a large-scale COVID-19 test from one county this week to most cities with nearly 22 million residents as residents prepare for a closure that is almost identical to Shanghai’s tight blockade.

On the supply side, analysts say that the abolition of Russian oil from the market will continue to support prices.

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On the supply side, analysts say that the abolition of Russian oil from the market will continue to support prices

“I have doubts that the potential of European energy sanctions on Russia’s oil and natural gas can be ignored for a long time,” OANDA analyst Jeffrey Halley said in a note.

That said, a few more negative headlines from Beijing about COVID sanctions could shift the balance clearly lower this week, Halley added.

Separately, in a bearish signal for the oil market, five analysts surveyed by Reuters estimated on average that U.S. crude oil inventories had increased by 2.2 million barrels in the week to April 22nd.

Gasoline stocks rose about 500,000 barrels last week, and distillate inventories, including diesel and heating oil, are expected to decline by 600,000 barrels.

The survey was conducted prior to the release of the inventory report from the American Petroleum Institute at 4:30 pm EDT (2030 GMT) on Tuesday. The official data of the government’s Energy Information Administration will be released on Wednesday.

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(This story has not been edited by NDTV staff and is automatically generated from a syndicated feed.)

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