Oil prices rose at the start of the week after the United States announced a refueling of its strategic crude reserves. China's plan to revive consumption after abandoning COVID zero policy also took a hit
Oil edged higher at the open of the week on the back of the Biden administration's plan to start replenishing its strategic crude stockpile and China's pledge to revive consumption as it skipped Covid zero.
West Texas Intermediate advanced toward $75 a barrel after falling nearly 4% in the last two sessions of the past week. The Energy Department said Friday that the US is starting to replenish the Strategic Petroleum Reserve with 3 million barrel, fixed-price purchases. The announcement capped a year when President Biden made unprecedented use of SPRs to help curb rising domestic energy costs following Russia's invasion of Ukraine.
In China, the world's biggest crude importer, top leaders including President Xi Jinping said restoring and expanding consumption must take "priority" as they concluded a meeting setting economic priorities for 2023. This resolution may help reduce energy demand despite the rise and rise in Covid cases. The reopening process becomes difficult, with most schools in Shanghai being closed again.
Oil is still headed for a second monthly loss as concerns about a recession in the US and Europe mounted, with central bankers continuing to tighten policy. Furthermore, Russian flows have so far proved resilient as price caps imposed by the Group of Seven and the European Union have not caused major disruption. Among major buyers, India said it did not expect problems.
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