Oil futures rose Tuesday, lifted by optimism over Chinese demand as the country plans to drop quarantine requirements for incoming travelers and as a brutal U.S. winter storm forced the temporary closure of several Texas refineries.
West Texas Intermediate crude for February delivery
rose 55 cents, or 0.7%, to $80.11 a barrel on the New York Mercantile Exchange.
February Brent crude
the global benchmark, was up 61 cents, or 0.7%, at $84.53 a barrel on ICE Futures Europe. March Brent
the most actively traded contract, gained 55 cents, or 0.6%, to trade at $85.05 a barrel.
was flat at $2.384 a gallon, while January heating oil
rose 1.6 to $3.317 a gallon.
January natural gas
rose 2.2% to $5.192 per million British thermal units.
Crude oil prices were finding support to begin a holiday-shortened week after China on Monday took a step toward fully reopening the country to travel. U.S. and U.K. markets were closed Monday for Christmas holidays.
The National Health Commission said China would drop a quarantine requirement for passengers arriving from abroad effective Jan. 8. Arriving passengers currently must quarantine for five days at a hotel and then three days at home. Previously, incoming travelers had been required to quarantine as many as three weeks.
Broader loosening of China’s once stringent COVID-19 curbs has provided support for crude, which has bounced off nearly one-year lows set earlier this month. China’s COVID restrictions have been seen curtailing crude demand in 2022.
“Adding to oil’s upside on Tuesday is the improved demand outlook for China, while the Arctic weather in the U.S., which has hit oil and gas output as well as forced the closure of refineries, is further helping extend the rebound from the early December lows,” said Raffi Boyadjian, lead investment analyst at XM, in a note.
Winter weather knocked out 1.5 million barrels a day of production at refineries on the U.S. Gulf Coast Friday, Reuters reported, though the outages were expected to be short-lived.