Oil prices rose in early trade on Thursday, building on gains in the previous session as China’s demand outlook improves and concerns rise over the impact of sanctions on Russian supply. Brent crude rose 50 cents, or 0.6%, to $83.17 per barrel by 0135 GMT, while U.S. West Texas Intermediate crude also rose 50 cents, or 0.7%, to $77.91 per barrel.
Both benchmarks rose 3% in Wednesday’s session, settling at the highest levels since December 30. Top oil importer China is reopening its economy after the end of strict COVID-19 curbs, boosting optimism that demand for fuel will grow in 2023.
China’s industrial output is expected to have grown by 3.6% in 2022 from the previous year, the Ministry of Industry and Information Technology said, despite production and logistics disruptions from COVID-19 curbs. The market is bracing for additional curbs aimed at Russian fuel products sales set to come into force in February as the European Union (EU) keeps working on more sanctions against Moscow over the invasion of Ukraine.
The U.S. Energy Information Administration said the upcoming EU ban on seaborne imports of petroleum products from Russia on Feb. 5 could be more disruptive than the EU ban on seaborne imports of crude oil from Russia implemented in December 2022. Russian Deputy Prime Minister Alexander Novak said the country’s oil producers have had no difficulties in securing export deals despite Western sanctions and price caps. An international price cap imposed on sales of Russian crude took effect on Dec. 5.