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China on Wednesday announced the most sweeping changes to its
resolute anti-COVID regime since the pandemic began, while at
least 20 oil tankers faced delays in crossing to the
Mediterranean from Russia's Black Sea ports.
Brent crude rose 27 cents, or 0.4%, to $77.44 a barrel by 1120
GMT, while U.S. West Texas Intermediate (WTI) crude gained 49
cents, or 0.7%, to $72.50.
"Today, we do see some green price action," said Naeem Aslam,
analyst at Avatrade. "Prices are oversold due to the intense
sell-off for the past few days. However, the price action still
doesn't show a strong bullish bias."
The 14-day relative strength index for Brent was below 30 on
Thursday according to Eikon data, a level taken by technical
analysts as indicating an asset is oversold and could be poised
for a rebound.
Both Brent and U.S. crude hit 2022 lows on Wednesday, unwinding
all the gains made after Russia's invasion of Ukraine
exacerbated the worst global energy supply crisis in decades and
sent oil close to its all-time high of $147.
Western officials were in talks with Turkish counterparts to
resolve the tanker queues, a British Treasury official said on
Wednesday, after the G7 and European Union rolled out new the
restrictions on Dec. 5 aimed at Russian oil exports.
The queues suggest that "available supply from the Black Sea is
already affected by the punitive measure," said Tamas Varga of
oil broker PVM.
"In a healthy economic climate, such a development would be the
equivalent of firing the starting gun in the race back to $100."
Concerns of economic slowdown, weakening fuel demand and the
prospect of more interest rate hikes in the United States
weighed. The Federal Reserve is widely expected to raise
interest rates by 50 basis points next week.
While U.S. crude inventories fell last week, gasoline and
distillate inventories surged, adding to concern about easing
demand. [EIA/S]
(Reporting by Jeslyn Lerh in Singapore; Additional reporting by
Laila Kearney in New York; editing by Arun Koyyur and Jason
Neely)
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