Oil rises as Chinese demand picks up, geopolitical risks

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Brent oil futures were up 70 cents, or 0.78%, to $90.53 a barrel.

London:

Oil rose Thursday as the prospect of higher Chinese demand and heightened geopolitical risks outweighed fears of a recession following a wave of rate hikes by the central bank, including the Bank of England.

Brent oil futures rose 70 cents, or 0.78%, to $90.53 a barrel at 1054 GMT, while US West Texas Intermediate (WTI) crude rose 71 cents, or 86%, to $83 65.

Prices rose more than $1 earlier in the session following news that crude demand in China, the world’s largest oil importer, is recovering, dampened by strict COVID-19 restrictions.

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At least three Chinese state oil refineries and a private mega-refinery are considering increasing runs in October by 10% from September, in anticipation of stronger demand and a possible boost in fuel exports in the fourth quarter, those in the know said.

Meanwhile, Russia went on Thursday with its largest conscription since World War II, raising concerns that an escalation of the war in Ukraine could further damage supplies.

“[Russian President Vladimir Putin’s] frequent irrational actions and reactions will sometimes keep the market volatile and violent,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.

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The Bank of England kept a cap on prices, raised its key interest rate by 50 basis points to 2.25% and said it would continue to respond strongly to inflation “if necessary” despite the economy slipping into recession.

Following the Federal Reserve’s sharp 75 basis point rise on Wednesday, rate hikes also came strongly and quickly from the Swiss National Bank, the Norges Bank and the Central Bank of Indonesia, with further hikes expected from the South later in the day. African Reserve Bank.

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“This just goes to show how synchronized this current tightening cycle is,” Deutsche Bank said.

The Fed also indicated on Wednesday that US borrowing costs would continue to rise this year, in a move that pushed Brent and WTI to nearly two-week lows.

Further pressure followed the stock build-up. US crude inventories rose 1.1 million barrels to 430.8 million barrels in the week to Sept. 16, falling short of analysts’ expectations in a Reuters poll for an increase of 2.2 million barrels.

(This story was not edited by UK Time News staff and was generated automatically Platforms.)

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