07 Jun Oil prices rise on relaxed China COVID curbs, tight supplies
Oil prices continued their upward movement on Tuesday on an expected demand recovery in China as the world’s second-biggest economy relaxes tough COVID-19 curbs, and on doubts that a higher output target by OPEC+ producers would ease tight supply. Brent crude futures were up 28 cents, or 0.2%, at $119.79 barrel at 0601 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up 31 cents, or 0.3%, at $118.81 a barrel. The benchmark hit a three-month high of $120.99 on Monday.
Beijing and commercial hub Shanghai have been returning to normal in recent days after two months of painful lockdowns to stem outbreaks of the Omicron variant.
Top oil exporter Saudi Arabia raised the July official selling price (OSP) for its flagship Arab light crude to Asia by $2.10 from June to a $6.50 premium over Oman/Dubai quotes, just off an all-time peak recorded in May when prices hit highs due to worries of disruptions in Russian supplies. Last week, the Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, decided to boost output for July and August by 648,000 barrels per day, or 50% more than previously planned.
The increased target was spread across all OPEC+ members. However, many members have little room to ramp up output, including Russia, which faces Western sanctions.
Elsewhere, U.S. crude inventories likely fell last week, while gasoline and distillate stockpiles were seen up, a preliminary Reuters poll showed on Monday.