Oil rises on US reserve move

Oil rose to open the week on China’s promise to revive consumption as it abandons its zero-Covid policy and the Biden administration’s plan to begin replenishing the country’s strategic crude reserves. U.S. crude rose above $75 a barrel after losing almost 4% in the final two sessions of last week. President Xi Jinping said restoring and boosting consumption should “take priority” for 2023. That commitment could help support energy demand even as COVID cases rise and the reopening process remains bumpy. The Energy Department said Friday that U.S. authorities are moving to replenish the Strategic Petroleum Reserve with a fixed-price purchase of 3 million barrels. The announcement was made to help curb domestic energy costs that have soared after President Joe Biden’s Russian invasion of Ukraine. Oil is heading for a second monthly loss as recession concerns in the U.S. and Europe grow and central banks continue to tighten monetary policy. In addition, Russian flows have so far proven resilient, as a price cap imposed by the G7 and the European Union have not caused major disruptions. China’s “effort to expand consumption as a key economic priority for 2023” has helped paint a better demand outlook for oil, said Charu Chanana, market strategist at Saxo Capital Markets in Singapore, noting that news of the Strategic Petroleum Reserve refill also contributed.