# Oil rebounds from drop on China demand concerns
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-04-26
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Oil Prices Rebound on Russian Supply and Chinese Demand
Meta Description: Discover the latest update on oil prices as they rise amidst worries over Russian supply and Chinese demand. Stay informed with our in-depth analysis.
URL: https://financedigest.com/oil-rebounds-from-drop-on-china-demand-concernshtml

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By Rowena Edwards

LONDON – Oil prices rebounded in volatile trading on Tuesday as the market weighed concerns over Russian supply and Chinese demand.

Brent crude futures were up $1.26 cents, or 1.2%, at $103.58 a barrel by 1355 GMT. U.S. West Texas Intermediate contracts were up $1.14 cents, or 1.2%, at $99.68.

Brent and WTI had settled about 4% down on Monday and touched respective lows on Tuesday of $101.08 and $97.06 a barrel, pressured by concerns over demand in China, the [world’s largest](https://www.financedigest.com/at-chinas-largest-trade-fair-exporters-worry-about-world-economy.html "At China’s largest trade fair, exporters worry about world economy") crude oil importer.

[Chinese capital Beijing has expanded its COVID-19 mass testing to much of the city of nearly 22 million as the population braces for a lockdown similar to Shanghai’s stringent curbs](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened").

But Brent rose by $2/bbl earlier in the session after the People’s Bank of [China said it will step up monetary policy](https://www.financedigest.com/dutch-responds-to-us-china-policy-with-a-plan-to-curb-semiconductor-tech-exports.html "Dutch responds to US China policy with a plan to curb semiconductor tech exports") support to the real economy.

The prospect of [supply tightness in the physical market related to the phasing out of Russian oil](https://www.financedigest.com/oil-gains-as-russian-supply-cuts-temper-concerns-over-rate-hikes-high-stocks.html "Oil gains as Russian supply cuts temper concerns over rate hikes, high stocks") also added to bullish sentiment.

Germany [hopes to replace all deliveries of oil](https://www.financedigest.com/oil-rises-on-demand-hopes-as-banking-crisis-fears-subside.html "Oil rises on demand hopes as banking crisis fears subside") from Russia in a matter of days, Economy Minister Robert Habeck said on Tuesday.

Analysts said the release of [oil from emergency reserves had eased concerns](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns") over tight supply to a certain extent.

Focus has shifted towards the [demand side of the equation and worries about prolonged supply disruptions have greatly been mitigated by the release of 240 million bbls of SPR oil](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") by IEA members and by the ostensible, albeit somewhat obscured, dealing in Russian oil,” said Tamas Varga of oil broker PVM.

In a bearish signal for oil markets, five analysts [polled by Reuters](https://www.financedigest.com/bank-of-england-to-raise-rates-by-50bps-again-to-tame-inflation-reuters-poll.html "Bank of England to raise rates by 50bps again to tame inflation: Reuters Poll") estimated on average that U.S. crude inventories had increased by 2.2 million barrels in the week to April 22.

The poll was [conducted ahead of the release](https://www.financedigest.com/national-cinemedia-releases-first-cinema-attention-measurement-study-conducted-by-lumen-in-collaboration-with-dentsu.html "National CineMedia releases first cinema attention measurement study, conducted by Lumen in collaboration with dentsu") of the inventory report from the American Petroleum Institute at 4:30 p.m. EDT (2030 GMT) on Tuesday. The official [government Energy Information Administration data is due](https://www.financedigest.com/uniper-ceo-to-resign-due-to-government-takeover.html "Uniper CEO to resign due to government takeover") out on Wednesday.

Separately, the CPC pipeline and [Black Sea](https://www.financedigest.com/kremlin-remains-downbeat-on-state-of-black-sea-grain-deal.html "Kremlin remains downbeat on state of Black Sea grain deal") terminal, which ship about 80% of Kazakh crude exports, returned to full capacity on April 23 after working at half capacity for several weeks owing to storm-damaged mooring points.

(Additional reporting by Mohi Narayan in New Delhi and Liz Hampton in Denver; Editing by Louise Heavens and David Goodman)


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