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oil importer China is reopening its economy after the end of
strict COVID-19 curbs, boosting optimism that demand for fuel
will grow in 2023.
Brent crude rose $1.18, or 1.4%, to $83.85 a barrel by 1250 GMT,
while U.S. West Texas Intermediate crude gained $1.15, or 1.5%,
to $78.56.
Both benchmarks jumped 3% on Wednesday driven by hopes that the
outlook for the global economy may not be quite as pessimistic
as has been feared.
"A softer landing for the U.S., and perhaps elsewhere, combined
with a strong economic rebound in China following the current
COVID wave could make for a much better year than feared and
stimulate extra crude demand," said Craig Erlam of brokerage
OANDA.
The U.S. CPI data due at 1330 GMT is set to have a big impact on
oil and the wider market by shaping expectations of the speed of
interest rate hikes in the world's biggest economy.
"The mood is unreservedly upbeat but let us remember: it can
turn sour as quickly as it has improved if inflationary pressure
proves entrenched," said Tamas Varga of oil broker PVM.
Economists expect the rise in core U.S. consumer prices to have
slowed to an annual pace of 5.7% in December, versus 6% a month
earlier. Month-on-month headline inflation is seen at zero.
The market is also bracing for an additional curb on Russian oil
supply due to sanctions over its invasion of Ukraine.
The U.S. Energy Information Administration said the upcoming EU
ban on seaborne imports of petroleum products from Russia on
Feb. 5 could be more disruptive than the EU ban on seaborne
imports of crude oil from Russia implemented in December 2022.
(Additional reporting by Laura Sanicola and Emily Chow; editing
by Jason Neely and Susan Fenton)
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