Oil climbs on tight crude supply, China’s eased Covid-19 curbs

Oil prices nosed ahead in early Asian trade on Thursday, lifted by signs of tighter supply and by optimism over a Chinese demand recovery.

Brent crude futures rose 5c, or 0.06%, to $87.02 a barrel by 1.15am GMT, while US West Texas Intermediate (WTI) crude futures rose 16c, or 0.2%, to $80.71.

The giant Chinese cities of Guangzhou and Chongqing announced an easing of Covid-19 curbs on Wednesday, a day after demonstrators in southern Guangzhou clashed with police amid a string of protests against the world’s toughest coronavirus restrictions.

However, Chinese business activity shrank further in November, official PMI data showed on Wednesday, raising fears about next year.

Crude oil supply is expected to remain tight.

US crude oil stocks plunged by nearly 13-million barrels, the most since 2019, in the week ended November 25, according to the Energy Information Administration (EIA). However, US crude oil output surpassed 12-million barrels a day, the highest since before the onset of the coronavirus pandemic, the EIA said.

US Federal Reserve chair Jerome Powell said on Wednesday it was time to slow the pace of coming interest-rate hikes, which could support oil prices.

Capping gains, the Opec+ decision to hold its December 4 meeting virtually signals little likelihood of a policy change, a source with direct knowledge of the matter told Reuters on Wednesday.

Reuters