Oil consolidates amid concerns about demand in China and inventory data from the API

Oil prices continue to show a negative growth, driven by Covid-19 outbreaks in China. Such a complex infectious situation in the country has a negative impact on fuel demand recovery, as China is one of the largest oil importers in the world. 

The Middle Kingdom has been gradually shifting away from its strict Covid Zero policy and regime of isolation. However, a new massive surge in Covid-19 cases followed the easing of restrictions. Combined with quite doubtful statistics, this situation forced some countries to introduce new requirements for visitors from China.

Data from the American Petroleum Institute (API) showed that U.S. crude oil reserves declined by about 1.3 million barrels in a week. This figure was below expectations. 

Weekly U.S. government data will be released today, on December 29, at 16:00 GMT. 

It is also worth noting that markets got supported after Russia’s ban on export of crude oil and oil products. It will come into effect on February 1, 2023, and will last for five months. This ban will apply to countries that intend to adhere to the set price ceiling for Russian oil.