Oil edged higher at the week’s open on bullishness from the Biden administration’s plan to begin refilling its strategic crude reserves and a pledge from China to revive consumption as Covid Zero is abandoned.
West Texas Intermediate rose toward $75 a barrel after dropping almost 4% in the final two sessions of last week. The US is starting to replenish the Strategic Petroleum Reserve, starting with a 3-million barrel, fixed-price purchase, the Department of Energy said on Friday. The announcement caps a year that saw President Biden make unprecedented use of the SPR to help curb soaring domestic energy costs that followed Russia’s invasion of Ukraine.
In China, the world’s largest crude importer, top leaders including President Xi Jinping said restoring and expanding consumption should “take the precedence” as they concluded a meeting setting economic priorities for 2023. That pledge may help buttress energy demand even as Covid cases surge and the repoening process turns bumpy, with Shanghai shutting most schools again.
Oil is still headed for a second monthly loss as concerns about recessions in the US and Europe mounted, with central bankers continuing to tighten policy. In addition, Russian flows have so far proved to be resilient as a price cap imposed by the Group of Seven and European Union hasn’t led to major disruption. Among major buyers, India said it doesn’t expect problems.
This story has been published from a wire agency feed without modifications to the text.
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