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19 April 2024

Oil edges up on supply concerns, China demand hopes

By Reuters

Oil prices edged up after industry executives flagged concerns about limited spare capacity in the market and uncertainty over Russian supplies while demand from top crude importer China is recovering.
Brent crude futures had risen 40 cents, or 0.5%, to $86.58 a barrel by 0154 GMT after settling 0.4% higher on Monday.
U.S. West Texas Intermediate crude was at $80.76 a barrel, up 30 cents, or 0.4%, following a 1% gain in the previous session.
Brent prices are on track to rise for the sixth straight session, the longest stretch of gains since May 2022, buoyed by hopes of China's demand recovery and as new refining capacity in Asia and Middle East is being ramped up, processing more crude.
"The supply concerns that helped oil prices higher overnight likely stemmed from Chevron's CEO comment that there's 'not a lot of swing capacity' in oil markets," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
"The key unknown for 2023 will be the disruption to Russia's oil and refined product exports."
Chevron Corp chief executive Mike Wirth said ships carrying Russian crude and products now have to travel over longer distances to reach non-sanctioned markets while oil inventories and swing supplies are limited, making the global market vulnerable to any unexpected supply disruption.
Traders are keenly awaiting China's oil trade data for January and February later on Monday, looking for signals of recovery in demand following Beijing's lifting of pandemic controls late last year.
In the U.S., this week's reports of crude and product inventories were expected to show decreases for last week, a preliminary Reuters poll showed on Monday.
The weekly reports from the American Petroleum Institute, an industry group, are due at 4:30 p.m. ET (2130 GMT) on Tuesday, and at 10:30 a.m. (1530 GMT) on Wednesday from the Energy Information Administration.