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China, the world's top crude oil importer, is experiencing its
first of three expected waves of COVID-19 cases after Beijing
relaxed mobility restrictions but said it plans to step up
support for the economy in 2023.
"There is no doubt that demand is being adversely influenced,"
said Naeem Aslam, analyst at brokerage Avatrade.
"However, not everything is so negative as China has vowed to
fight all pessimism about its economy, and it will do what it
takes to boost economic growth."
Brent crude gained 65 cents, or 0.8%, to $79.69 a barrel by 1248
GMT while U.S. West Texas Intermediate crude rose 85 cents, or
1.1%, to $75.14.
Oil surged towards its record high of $147 a barrel earlier in
the year after Russia invaded Ukraine in February. It has since
unwound most of this year's gains as supply concerns were edged
out by recession fears, which remain a drag on prices.
The U.S. Federal Reserve and European Central Bank raised
interest rates last week and promised more. The Bank of Japan,
meanwhile, could shift its ultra-dovish stance when it meets on
Monday and Tuesday.
"The prospect of further rate rises will hit economic growth in
the new year and in doing so curb demand for oil," said Stephen
Brennock of oil broker PVM.
Oil was supported by the U.S. Energy Department saying on Friday
that it will begin repurchasing crude for the Strategic
Petroleum Reserve - the first purchases since releasing a record
180 million barrels from the reserve this year.
(Reporting by Alex LawlerEditing by David Goodman and Barbara
Lewis)
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