Oil Prices Slip After China Cuts Import Quotas

By Reuters
Reuters
Reuters
December 30, 2021 Updated: December 30, 2021

LONDON—Oil prices eased on Thursday after the world’s top importer China cut the first batch of crude import allocations for 2022, offsetting the impact of U.S. data showing fuel demand had held up despite soaring Omicron coronavirus infections.

Brent crude futures fell 52 cents, or 0.7 percent, to $78.71 a barrel at 1022 GMT. U.S. West Texas Intermediate (WTI) crude futures slid 59 cents, or 0.8 percent, to $75.97 a barrel after six straight sessions of gains.

Oil prices pared earlier gains after China, the world’s top crude importer, lowered the first batch of 2022 import quotas to mostly independent refiners by 11 percent.

Global oil prices have rebounded by between 50 percent and 60 percent in 2021 as fuel demand roared back to near pre-pandemic levels and deep production cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) for most of the year erased a supply glut.

U.S. Energy Information Administration data on Wednesday showed crude oil inventories fell by 3.6 million barrels in the week to Dec. 24, which was more than analysts polled by Reuters had expected.

Gasoline and distillate inventories also fell, versus analysts’ forecasts for builds, indicating demand remained strong despite record COVID-19 cases in the United States.

Oil prices also drew support from steps taken by governments to limit the impact of record high COVID-19 cases on economic growth, such as easing testing rules.

OPEC+ will meet on Jan. 4 to decide whether to continue increasing output in February.

Saudi Arabia’s King Salman said on Wednesday the OPEC+ production agreement was needed for oil market stability and that producers must comply with the pact.

By Dmitry Zhdannikov

Reuters