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China will stop requiring inbound travellers to go into
quarantine, starting from Jan. 8, the National Health Commission
said on Monday in a major step towards easing curbs on borders
that have been largely shut since 2020.
Brent crude was up 56 cents, or 0.7%, at $84.48 a barrel by 1240
GMT and U.S. West Texas Intermediate crude gained 35 cents, or
0.4%, to $79.91. Both benchmarks hit their highest since Dec. 5
earlier in the session.
"This is certainly something that traders and investors have
been hoping for," Avatrade analyst Naeem Aslam said of China's
plan over the quarantine rule.
UK and U.S. markets had been closed on Monday for Christmas
holidays.
Equities gained while the U.S. dollar softened on Tuesday in
response to the Chinese move. A weaker dollar makes oil cheaper
for holders of other currencies and tends to support risk
assets.
Oil also drew support from worries over supply disruption
because of winter storms in the United States, said Kazuhiko
Saito, chief analyst at Fujitomi Securities.
"But the U.S. weather is forecast to improve this week, which
means the rally may not last too long," he said.
As of Friday, some 1.5 million barrels of daily refining
capacity along the U.S. Gulf Coast was shut, while oil and gas
output from North Dakota to Texas suffered freeze-ins, cutting
supply.
Concern over a possible production cut by Russia also provided
price support.
Russia might cut oil output by 5% to 7% in early 2023 as it
responds to price caps, the RIA news agency cited Deputy Prime
Minister Alexander Novak as saying on Friday.
(Reporting by Alex LawlerAdditional reporting by Yuka Obayashi
in Tokyo and Isabel Kua in SingaporeEditing by David Goodman)
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