Oil prices rose by more than $1 on Thursday in response to tighter supplies and on news that China is considering a cut in the duration of quarantine for inbound visitors.
U.S. West Texas Intermediate crude for November delivery, which expires on Thursday, rose $1.43, or 1.7 per cent, to $86.98 per barrel.
The WTI contract for December delivery was up 1.8 per cent, or $1.51, at $86.03 a barrel.
China, the world’s largest 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.
The looming European Union ban on Russian crude and oil products, as well as the output cut from the Organisation of the Petroleum Exporting Countries and other producers including Russia, known as OPEC+, have also supported prices.
OPEC+ agreed on a production cut of 2 million barrels per day in early October.
Separately, U.S. President Joe Biden announced a plan on Wednesday to sell off the rest of his release from the nation’s emergency oil reserve by year’s end, or 15 million barrels of oil and begin refilling the stockpile as he tries to dampen high gasoline prices ahead of midterm elections on Nov. 8.
The announcement, however, failed to ease oil prices, as official U.S. data showed that U.S. SPR reserves last week fell to their lowest since mid-1984, while commercial oil stocks fell by more than expected.
“Yesterday’s failed attempt at cooling oil prices is further evidence that the U.S. has lost its influence over global oil markets,” Brennock said.
Meanwhile, global demand for fuel remains uncertain.
The U.S. economic activity expanded modestly in recent weeks, although 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.