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Oil futures rose Thursday, finding support as China moved to ease some COVID-19 curbs and traders awaited a weekend meeting of OPEC+ ministers.
Price action
-
West Texas Intermediate crude for January delivery
CL.1,
+1.38% CLF23,
+1.38%
rose 94 cents, or 1.2%, to $81.49 a barrel on the New York Mercantile Exchange. -
February Brent crude
BRN00,
+1.15% BRNG23,
+1.15% ,
the global benchmark, was up 87 cents, or 1%, at $87.84 a barrel on ICE Futures Europe. -
Back on Nymex, January gasoline
RBF23,
+0.55%
rose 0.4% to $2.395 a gallon, while January heating oil
HOF23,
+0.30%
was little changed at $3.362 a gallon. -
January natural gas
NGF23,
+3.46%
rose 1.4% to $7.028 per million British thermal units.
Market drivers
Crude found support as China showed further signs it will move to ease COVID curbs after a series of rare but widespread protests. China’s COVID restrictions have crimped demand from one of the world’s largest energy consumers.
In Beijing, officials will let those infected patients who are low risk to quarantine at home for a week, rather than in a government center, Bloomberg reported, citing sources. China has required anyone with any degree of COVID to stay at those government sites to cut transmission.
Traders are also focused on a Dec. 4 meeting of the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+. The group’s decision earlier this week to make the meeting virtual rather than in-person was seen as a sign by some analysts that it would likely hold production steady.
“It is still not exactly clear what action if any, the group will take. The weakness in the market over the last several weeks means that further supply cuts cannot be ruled out,” said Warren Patterson, head of commodities strategy at ING, in a note.
Read: U.S. oil taps its lowest price of the year thanks to China as OPEC+ output decision looms
Crude saw sharp gains Wednesday after the Energy Information Administration on Wednesday reported that U.S. crude inventories dropped 12.6 million barrels for the week ended Nov. 25. That followed two consecutive weekly falls.
On average, analysts forecasted a decline of 4.4 million barrels, according to a poll conducted by S&P Global Commodity Insights. The American Petroleum Institute said late Tuesday that U.S. crude inventories fell 7.9 million barrels last week, according to news reports.
Remarks Wednesday by Federal Reserve Chairman Jerome Powell that were seen affirming expectations that policy makers will likely deliver a smaller 50 basis point rate hike when they meet later this month sent the U.S. dollar skidding and helped lift crude.
A weaker dollar makes dollar-denominated commodities cheaper to users of other currencies.
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