Both contracts went up more than 1 dollar earlier in the sessionafter Brent fell $1 in early trading.
The Chinese government has raised the export quotas for refined petroleum products in the first batch to 2023. Traders attributed the rise to expectations of a low domestic demandsince the eldest World crude oil importer continues to battle waves of COVID-19 infections.
The Chinese government released 18.99 million tons of quotas for cover mainly exports of gasoline, diesel and jet fuel, 46% more than the 13 million tons allocated a year earlieraccording to consulting firms JLC and Longzhong told Reuters.
Of the total, state-owned China Petrochemical Corp (Sinopec), China National Petroleum Corp, China National Offshore Oil Company and Sinochem Group, as well as the company private Zhejiang Petrochemical Corp.got a total of 18.73 million tons of permitsaccording to the agencies.
The remainder was allocated to a refinery affiliate of state defense conglomerate Norinco and China National Aviation Fuel Company.. The Commerce Ministry did not immediately respond to a request for comment.
The government is rushing to prop up its faltering economy by encouraging refiners to step up operations and take advantage of strong export earnings. The higher quotas also reflected the weakness of national fuel consumptiongiven that the increase in COVID infections after the removal of virus control measures slowed travel and economic activityaccording to a trader.
In addition, it includes the long-term goal of reducing carbon emissions, so the authorities intend to curb excessive processing in refineries and cut exports. But the slowdown in 2022 caused the government to modify its fuel policy.
It is added that the Chinese factory activity contracted in December by increasing COVID-19 infections that disrupted production.
IMF Managing Director, Kristalina Georgieva, declared on Sunday that United States, Europe and Chinathe main engines of global growth, are they were slowing down simultaneouslywhich would make 2023 was harder than 2022 for the world economy.
The The market will be attentive to the minutes of the Federal Reserve’s monetary policy meeting American for December, which will be published on Wednesday. The Fed raised rates 50 basis points (bp) in December, after four consecutive hikes of 75 bp each.
“The prospect of further rate hikes will affect economic growth in the new year and, by doing so, it will curb demand for oil,” says Stephen Brennock of oil broker PVM.
Besides, U.S. December payroll data to be released on Fridaywhich are expected to show that the labor market remains tight.
The big banks reported their forecasts for oil in 2023. The most bullish vision is given by Morgan Stanley that sees Brent, a reference in Europe, at 103.7 dollars a barrel, while West Texas, a reference in the US, places it at 101.25 dollars per barrel.
In the case of Bank of America (BofA) his forecast is $100 a barrel for Brent and $94 a barrel for West Texas. Below $100 is the estimate you have made Goldman Sachswith a price for Brent of 98 dollars and 92 dollars for West Texas.
JP MorganFor its part, it sets the price of Brent crude at $96 for West Texas’s $90 a barrel. The entity that has predicted that oil prices will continue registering downward pressure and trading at 80 dollars a barrel of Brent is citiwhich puts West Texas at $75 a barrel.
Source: Ambito
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