Oil prices offset early losses on hopes of recovery in China and concerns over global supply
Oil prices rebounded early on Thursday amid news easing restrictions in China, fueling hopes that fuel demand will improve. Slow economic growth and continued concerns over global supply shortages are still valid.
Oil markets remain bullish as the European Union's proposed import ban on Russian crude is expected to further tighten global supply.
Brent crude futures for July were up $1.32, or 1.2%, to $110.43 a barrel at 0700 GMT, after falling more than $1 at the start of the session.
West Texas Intermediate (WTI) crude futures for June rose 62 cents, or 0.6%, to $110.21 a barrel and rebounded after an early loss of over $2. July WTI rose $1.33, or 1.2%, to $108.26 a barrel.
Front-month prices for both benchmarks fell nearly 2.5% on Wednesday.
The decline in Wall Street lowered sentiment in early trading as it underscored concerns about weakening consumption and fuel demand.
Asian stocks followed a steep selloff on Wall Street on Thursday as investors worried about rising global inflation, China's zero-COVID policy and the Ukraine war.
The European Union this month proposed a new package of sanctions against Russia for its invasion of Ukraine. This includes a complete ban on oil imports within six months, but the measures have yet to be adopted and Hungary is among the most rejecting parties.
The European Commission announced on Wednesday its 210 billion euro ($220 billion) plan to move away from Moscow to end Europe's reliance on Russian fossil fuels by 2027 and accelerate its transition to green energy.
Also, U.S. oil stocks inventories fell last week, an unexpected drawdown, as refiners ramped up output in response to tight product inventories and near-record exports that have forced U.S. diesel and gasoline prices to record levels.
Capacity utilization on both the East Coast and Gulf Coast was over 95%, bringing the refineries closer to the highest possible operating rates.
Investors in China are closely watching plans to ease restrictions in the country's most populous city, Shanghai, starting June 1, which will undoubtedly lead to a recovery in oil demand in the world's largest crude importer.
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