Oil rebounds as China plans to boost the economy
The market rallied on volatile trade as China plans to bolster its economy against a possible coronavirus lockdown. Oil prices rose on Tuesday.
Brent crude futures were up $2.67, or 2.6%, to trade at $104.99 a barrel, while West Texas Intermediate (WTI) contracts were up $3.16, or 3.2%, to $101.70.
Trading was choppy with Brent touching a session low of $101.08 and WTI at $97.06 a barrel, pressured by concerns over demand in China, the world's largest crude oil importer. On Monday, both benchmarks settled down about 4%.
NYMEX ultra-low sulfur diesel futures rose 9.2% to $4.47 in a record close after Russia said it would halt gas supplies to Poland on Wednesday.
Any incentive in China is thought to increase oil demand. China's central bank said it would increase its prudent monetary policy support to the economy. Oil traders are keeping warm lockdown fears in Beijing and are focused on stimulus in China.
Analysts said the release of oil from emergency reserves eased concerns about tight supplies.
Gazprom said that Poland should start making payments under a new program from Tuesday and will stop gas supplies to Poland's PGNiG from Wednesday morning.
Russia's demand for payments from Poland in rubles will likely cause gas supply to stop and also contribute to even stronger diesel prices.
The European Union continued to consider options to cut imports of Russian oil as part of possible additional sanctions against Moscow over its invasion of Ukraine. Nothing was officially offered.
Germany said it hoped to replace all oil deliveries from Russia within a few days. Commodities trader Trafigura Group said it will halt all crude oil purchases from Russia's state oil company Rosneft by May 15.
US crude inventories increased by 4.8 million barrels last week, according to market sources inspired by the American Petroleum Institute. Analysts estimate inventories rose by about 2 million barrels in the week to April 22. According to sources, gasoline stocks fell by 3.9 million barrels, while distillate stocks increased by 431,000 barrels.
Official government Energy Information Administration (EIA) data will be released today.
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