International Business: Oil prices extend gains on China demand optimism – Gulf Digital News

International Business: Oil prices extend gains on China demand optimism – Gulf Digital News

SINGAPORE: Oil prices extended gains on Wednesday on hopes of demand recovery in China as the country gradually eases some of its strict Covid-19 containment measures.

Brent crude futures were up 48 cents, or 0.4%, at $112.41 a barrel at 0410 GMT, while US West Texas Intermediate (WTI) crude futures climbed 93 cents, or 0.8%, to $113.33 a barrel, paring some losses after oil prices fell by around 2% in the previous session.

Shanghai on Tuesday achieved its long-awaited milestone of three consecutive days with no new Covid-19 cases outside quarantine zones and on Monday set out plans for ending a lockdown that has lasted more than six weeks.

"Beyond the near term, less awful news on China offers a nip in the tail in the form of much higher oil demand and prices, which is positive for producers, but harmful for consumer sentiment," Stephen Innes, managing partner atSPI Asset Management, said in a client note.

US crude and gasoline stocks fell last week, market sources said, citing American Petroleum Institute figures on Tuesday. US government data is due on Wednesday.

"Soaring diesel and distillate prices, along with tight crude stocks is supporting WTI and I believe that situation will limit the downside from here