Chinese Authorities Take a Hard Look at the Oil Industry – But Crude Oil Rises Anyway

Crude oil futures closed higher overnight (Dec. 30) as market concerns about the Omicron coronavirus eased. In addition, the decline in U.S. crude inventories suggests that U.S. oil demand remains strong.

  • WTI crude futures were up 43 cents, or 0.6%, at 76.99 dollars a barrel.
  • BRENT crude futures were up 9 cents, or 0.1%, at $79.32 a barrel.

The market continues to receive positive factors, several institutional research shows that the risk of infection with the COVID-19 Omicron strain leads to fewer hospitalizations than those infected with Delta strain.

In addition, the EIA announced that crude oil inventories fell by 3.5 million barrels last week.

Crude oil, however, experienced a short dip yesterday after China cut its first crude oil import allocations for the new year, which is a demand damper for the world’s largest importer of crude oil. Nearly 40% of the quotas will go to the three major companies, Zhejiang Petroleum & Chemical Corp, Hengli Petrochemical Co, and Shenghong Group, which are expected to have large, modern refineries with lower emissions.

The setting of the quota is in line with the Chinese government’s plan to reform the oil industry to reduce pollution and combat illegal activities. Currently, the Chinese government has ordered the inspection of several small refineries after finding irregularities in tax returns.

The Spot Market is Open

Friday, December 31, 2021

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
09.35

76.24

-0.75

-0.97%

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