Oil prices rose amid the suspension of the Keystone pipeline, as well as the easing of COVID restrictions in China, Report informs referring to the auction data.
February futures for Brent on the London ICE Futures exchange rose by $1.13 (1.45%) to $79.12 per barrel.
January futures for WTI rose by $1.01 (1.38%) on the New York Mercantile Exchange (NYMEX) to $74.18 per barrel.
Suspension of the oil pipeline connecting oil fields in southern Canada and refineries on the coast of the Gulf of Mexico in the US, has reduced supply on the world market by 600,000 barrels per day. The Keystone pipeline was closed December 7 after a depressurization that resulted in a leak of 14,000 barrels of oil in Kansas. The company TC Energy did not name the timing of the resumption of the pipeline.
Shutting off the pipeline is expected to lead to a decrease in oil reserves in US storage facilities. The median forecast of seven analysts polled by Reuters is for a 3.9 million barrel drop in oil inventories in the week of December 3-9.
Analysts at Bank of America believe that the successful reopening of the Chinese economy, coupled with the Fed’s easing in interest rate rhetoric could spur demand and push Brent prices above $90.
Over the past week, the Chinese authorities have lifted part of the restrictive measures. Thus, the requirements for testing were relaxed, as well as tracking the movement of citizens was canceled.
However, the worsening epidemiological situation in China’s major cities is still holding back market optimism, analysts warn. Oil prices will receive good support only after there are clear signs of a recovery in demand.
10:17
Global oil prices rose on December 13 morning, as markets are assessing the likelihood of an increase in demand for this type of raw material, Report informs referring to the auction data.
The price of February futures for Brent crude rose by 1.41% to $79.09 per barrel, January futures for WTI grew by 1.37% to $74.17.
On December 13 morning, the cost of oil was growing, while investors continue to assess the prospects for increasing demand for this type of crude in the market. So, an increase in demand may follow the easing of coronavirus restrictions in China.
The recovery in the market and the accompanying increase in demand for oil will overshadow fears of a slowdown in economic growth, Vishnu Varathan, an analyst at Mizuho Bank in Singapore, told Bloomberg.
Traders are also assessing the likelihood of a reduction in the supply of oil against the backdrop of recent news about the suspension of oil pumping due to a leak in the Keystone Pipeline System passing through Canada and the US.
According to media reports, over 14,000 barrels of oil fell into a stream in the US state of Kansas.
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