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(Bloomberg) — Oil rose as China took more steps toward unwinding its strict Covid Zero policy that has battered its economy, and freezing weather across the US prompted refinery closures in the key Texas Gulf Coast area.
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West Texas Intermediate prices climbed as much as 1.1% in early Asian trade. China will no longer subject inbound travelers to quarantine from early January, putting the country on track to emerge from three years of self-imposed global isolation. More than a third of Texas Gulf Coast refining capacity shut over the past few days, including the two largest plants in the US.
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Crude prices rallied last week after Russia warned it may reduce output by as much as 700,000 barrels a day in response to sanctions. Oil has whipsawed this year as traders weigh Putin’s war in Ukraine, fears of global recession and concerns over the unabated spread of Covid infections across China. The Chinese economy continued to slow in December as activity slumped due to more people staying home.
In the US, extreme weather conditions forced the two largest US refineries — Motiva Port Arthur and Marathon Galveston Bay — to stop producing gasoline and diesel. More than 1.8 million barrels a day of refining capabilities have been sidelined.
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