(New York) Oil prices continued to advance on Tuesday, boosted by Chinese authorities raising refinery import quotas, which the market interpreted as a first sign of accelerating demand for crude.
The price of a barrel of Brent from the North Sea, for delivery in March, gained 0.59%, to close at 80.10 dollars.
The barrel of American West Texas Intermediate (WTI), with maturity in February, took him 0.65%, to 75.12 dollars.
The Chinese government published new crude import quotas for refiners on Monday, significantly higher than those of the first wave of authorizations for 2023, unveiled in October.
In addition to the independent refiners already on the list, a newcomer, Shenghong Petrochemical, has been added, with a quota almost double that of the operators who have been excluded, which should contribute to the increase in import volumes.
The acceleration in prices comes after the market tested, for the second time in a month, the symbolic threshold of 70 dollars a barrel for WTI last week, and found support once close to this low, noted Stephen Schork, analyst and author of the Schork Report.
“So there are probably bullish traders trying to capitalize on the news coming out of China, which is giving the market some strength,” the analyst explained.
Along with the increase in quotas, China on Sunday lifted the quarantine requirement for travelers from abroad and thus ended almost three years of isolation to fight against the coronavirus.
However, believes Daniel Ghali, of TD Securities, “in the short term, the rise in cases (of COVID-19 in China) is an element that compensates” the effect of the reopening and the lifting of health restrictions on the price of black gold.
On Sunday, Jiao Yahui, one of China’s National Health Commission (NHC) officials, said the wave of infections showed signs of calming down, but authorities expected a rebound with holiday travel. Chinese New Year, from January 22 to February 5.
Another factor restraining the rise in prices, the decision of the American government to reject all the initial proposals submitted within the framework of its call for tenders to replenish strategic reserves (SPR), according to a statement made to AFP by the ministry. American Energy (DOE).
This first call for tenders, launched in mid-December, covers three million barrels and comes after a 16-month streak which saw the United States extract some 248 million barrels from the SPRs, or 40% of the total.
The American authorities “passed their turn, presumably thinking that prices would fall further” and that buying back oil later would then be cheaper.