The oil prices rose modestly on Tuesday in a volatile session as the market weighed supply concerns for Russia and the demand for China.
At 11:17 GMT, crude oil futures Brent were up 41 cents, or 0.4%, at $102.73 a barrel, while contracts for the West Texas Intermediate US oil rose 18 cents, or 0.2%, at $98.72 a barrel.
Both contracts were down about 4% on Monday.
The concern for demand in China, the world’s largest crude importer, added to the downward pressure on Tuesday. The Chinese capital, Beijing, has expanded mass testing of Covid-19 to a large part of its almost 22 million inhabitants, while the population prepares for an imminent confinement similar to that seen in Shanghai.
However, both oil contracts rose more than a dollar a barrel at the beginning of the session, after the declaration of the People’s Bank of China that monetary policy support for the real economy will increase.
“I continue to expect more political support, but not the policy deluge that markets have been expecting, which could leave oil markets adrift in the short term, looking for support in the summer travel season in USA and in the EU sanctions,” said stephen innes from SPI Asset Management in a note.
The perspective of a supply shortage in the physical market related to the withdrawal of Russian oil provided price support.
The parliamentary parties of the ruling coalition of Germany have asked the government to go ahead with a plan to phase out imports of russian oil and gas “as soon as possible”.
However, analysts say the release of oil from emergency reserves has eased concerns about supply shortages.
Elsewhere, in a bearish sign for oil markets, five analysts polled by Reuters estimated on average that crude oil inventories USA they had risen by 2.2 million barrels in the week to April 22.
The survey was carried out before the publication of the inventory report of the American Petroleum Institute (API, for its acronym in English) at 20:30 GMT on Tuesday. The official data of the Energy Information Administration will be published on Wednesday.