Oil steady as China revival hopes offset Russia uncertainty

SINGAPORE – Oil futures were little changed in Asia on Wednesday as hopes of improved Chinese demand offset uncertainty about how a Western cap on Russian oil prices would play out, keeping markets on edge after a sharp fall in the previous session.

Brent crude futures edged up 3 cents, or 0.04 percent, to $79.38 a barrel by 0717 GMT, after they fell below $80 for the second time in 2022 during the previous trading session.

U.S. crude futures mostly traded sideways, and were down 9 cents or 0.12 percent to $74.16 a barrel.

Brent’s slump on Tuesday was the largest daily decline since late September, which have traded in a $62 range this year.

Expectations of rising China demand continued to be a positive driver, as the country posted fewer new COVID-19 infections for the second consecutive day and announced sweeping changes in its tough anti-virus policy.

China’s national health authority said on Wednesday that asymptomatic COVID-19 cases and those with mild symptoms can quarantine at home, in the strongest sign so far that China is preparing its people to live with the disease.

“China has (been) rapidly eased COVID-19 restrictions, which may boost demand,” markets analyst Leon Li at CMC Markets said in a note.

The reopening could see a 1-percent boost to global oil demand, ANZ said in a client note.

Data earlier on Wedneday showed China’s crude oil imports in November rose 12 percent from a year earlier to their highest in 10 months, as companies replenished stocks with cheaper oil and as new plants started up.