© Archyde.com. An oil pump in the US state of Texas, in a photo from Archyde.com archive.
SINGAPORE (Archyde.com) – Oil prices rose on Wednesday, reversing losses in the previous session, as investors cashed in on riskier assets such as commodities amid gains in stock markets and signs of renewed demand in top oil importer China.
By 0455 GMT, Brent crude futures for December settlement rose 46 cents, or 0.5 percent, to 90.49 a barrel.
US West Texas Intermediate crude for November delivery recorded $83.69 a barrel, an increase of 87 cents, or 1.1 percent.
In the previous session, it fell 1.7 percent and US crude fell 3.1 percent to its lowest level in two weeks on reports that US President Joe Biden plans to withdraw more barrels from the Strategic Petroleum Reserve.
Oil prices were also supported by risk appetite, which rebounded thanks to encouraging US corporate earnings and rising stock markets.
“The slight rise in oil prices is likely to be due to the high sentiment in stock exchanges and the return of risk in trading,” said Sophro Sarkar, senior energy analyst at DBS Bank in Singapore.
Prices also supported in light of signs of recovery in Chinese demand. Private refining giant Zhejiang Petrochemical Corp got an additional quota for 2022 import of ten million tons, and the state-run ChemChina took an additional quota of 4.28 million tons. That equates to regarding 104 million barrels.
The expected ban from the European Union on crude and Russian oil products and the production cut decided by the OPEC + group, consisting of the Organization of Petroleum Exporting Countries (OPEC) and other producers, including Russia, amounting to two million barrels per day, has kept prices strong.
An OPEC+ cut and an EU embargo will put pressure on supplies in an already tight market. European Union sanctions on Russian oil will come into effect in December and February, respectively.
To fill the gap, Biden will announce a plan later on Wednesday to sell the remaining SPR inventory and reveal details of a strategy to refill the stockpile when prices fall, a senior administration official said.
A senior official said the administration plans to sell 15 million barrels of its reserves in December, the last batch of 180 million barrels withdrawn this year.
Market sources, citing figures from the American Petroleum Institute, said on Tuesday that crude stocks in the United States fell by regarding 1.3 million barrels in the week ending October 14. Gasoline stocks fell by 2.2 million barrels, while distillate stocks fell by 1.1 million barrels.
Inventory data from the Energy Information Administration, the statistical arm of the US Department of Energy, is due later Wednesday.
(Prepared by Doaa Muhammad for the Arabic Bulletin)
