Crude rises on tight supplies and talk of China easing Covid curbs

London — Oil prices rose more than $1 a barrel on Thursday in response to tighter supplies and on news that China is considering a cut in the duration of quarantine for inbound visitors.

Brent crude futures rose $1.33, or 1.4%, to $93.74 a barrel at 10.20am GMT. West Texas Intermediate (WTI) for November delivery, which expires later on Thursday, rose $1.43, or 1.7%, to $86.98l. The WTI contract for December delivery was up 1.8%, or $1.51, at $86.03 a barrel.

“Oil prices are extending their ascent at the time of writing amid reports that China is considering cutting Covid quarantine measures for visitors,” said Stephen Brennock of PVM Oil.

China, the world’s biggest crude importer, has stuck to strict Covid-19 curbs this year, which weighed heavily on business and economic activity, lowering demand for fuel.

Bloomberg news reported on Thursday that Beijing is considering cutting the quarantine period for inbound visitors to seven days from 10 days, citing people familiar with the matter.

A looming EU ban on Russian crude and oil products, as well as the output cut from Opec and allies including Russia, collectively known as Opec+, have also supported prices. Opec+ agreed to cut production by 2-million barrels a day in early October.

US President Joe Biden announced a plan on Wednesday to sell off the remainder of his release from the nation’s emergency oil reserve by the end of the year — 15-million barrels of oil — and replenish the stockpile as he tries to ease high petroleum prices in the run-up to midterm elections on November 8.

The announcement failed to ease oil prices after official US data showed that inventories at the Strategic Petroleum Reserve last week fell to their lowest since mid-1984, while commercial oil stocks fell by more than expected.

“[Wednesday’s] failed attempt at cooling oil prices is further evidence that the US has lost its influence over global oil markets,” Brennock said.

Meanwhile, global demand for fuel remains uncertain. US economic activity has expanded modestly in recent weeks, though it was flat in some regions and declined in a couple of others, the Federal Reserve said on Wednesday in a report that showed firms growing more pessimistic about the outlook.

Reuters