Oil prices rise on China’s demand recovery, gasoline at an all-time high

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By Laura Sanicola

NEW YORK (Reuters) -Oil prices rose on Monday on optimism that would see significant demand recovery after positive signs that coronavirus pandemic was receding in the hardest-hit areas.



Brent crude rose $1.34, or 1.2%, at $112.89 a barrel at 12:10 pm EDT (1710 EDT) 1342 GMT, while US West Texas Intermediate (WTI) crude rose $2.22, or less than 0.1%, to $112.71 a barrel.

Shanghai aims to reopen broadly and allow normal life to resume for the city’s 25 million people from June 1, a city official said on Monday, after declaring that 15 of its 16 districts had eliminated cases outside quarantine areas.

However, it is estimated that 46 cities in are under lockdowns, hitting shopping, factory output and

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usage.

“We are seeing a lot of signals that demand will start returning in that region, supporting higher prices,” said Bob Yawger, director of futures at Mizuho.

In line with the unexpected industrial output decline, processed 11% less crude oil in April, with daily throughput the lowest since March 2020.

US The futures set an all-time high again on Monday as falling stockpiles fueled supply concerns. [EIA/S]

“Oil prices will remain bullish, especially WTI’s near-term contract, as US

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prices continued to rise amid weaker imports of petroleum products from Europe,” said Kazuhiko Saito, chief analyst at Fujitomi Securities.

Oil prices also found some support as the European Union’s diplomats and officials expressed optimism about reaching a deal on a phased embargo of Russian oil despite concerns about supply in eastern Europe.

Austria expects the EU to agree on the sanctions in the coming days, Foreign Minister Alexander Schallenberg said on Monday.

German Foreign Minister Annalena Baerbock said the bloc would need a few more days to find agreement.

“With a planned ban by the EU on Russian oil and slow increase in OPEC output, oil prices are expected to stay close to the current levels near $110 a barrel,” said Naohiro Niimura, a partner at Market Risk Advisory.

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(Additional reporting by Bozorgmehr Sharafedin in London; Additional reporting by Yuka Obayashi in Tokyo; Editing by Emelia Sithole-Matarise, Jason Neely, Mark Porter and Tomasz Janowski)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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