Oil gains due to expectations of demand in China, in focus

(Quotes updated, details added, analyst quote)

LONDON, Jan 12 (Reuters) – Oil prices continued to rise on Thursday, gaining more than 1% on an improved Chinese demand outlook and hopes that the US inflation index will signal a slower rate hike.

Major oil importer China is reopening the economy after the lifting of tough anti-COVID restrictions, adding to fuel demand optimism in 2023.

Futures for Brent crude rose by 15:04 Moscow time by 1.16% to $83.63 per barrel, WTI rose by 1.09% to $78.25 per barrel.

At the end of the session on Wednesday, both benchmarks jumped 3% due to hopes that the outlook for the global economy is not as pessimistic as the markets feared.

“A softer landing in the US and possibly elsewhere, combined with a strong economic recovery in China following the current wave of coronavirus, could mean a much better year than expected and will stimulate additional oil demand,” said OANDA’s Craig Erlam.

Consumer prices in the United States are expected to rise 6.5% year-on-year in December from 7.1% a month earlier, while core inflation stood at 5.7% from 6% in November.

In addition, the market is preparing for additional restrictions on the sale of Russian oil products, which will come into force in February, as the European Union continues to impose new sanctions against Moscow.

The US Energy Information Administration said a new EU ban on maritime imports of oil products from Russia could be more damaging than the embargo imposed by the EU in December on maritime imports of Russian crude oil.

The original message in English is available at the code: (Alex Lawler with the participation of Laura Sanikola and Emily Chow in Singapore, translated by Tomasz Kanik)