Oil climbs over 4% on Chinese demand hopes, and OPEC output cuts

Oil prices rose over 4% in European trade away from 11-month lows on track for the first profit in three days on hopes of improved Chinese demand as authorities scale back Covid 19 restrictions, and amid speculation OPEC+ might cut output once more. 

It comes ahead of initial data on US crude stocks, expected to show an inventory drawdown for the third week in a row. 

Global Prices

US crude rose over 4% to $79.61 a barrel, while Brent rallied 4.1% to $86.64 a barrel, with a session-low at $83.20. 

US crude fell 0.1% on Monday, marking 11-month lows at $73.62 a barrel, while Brent shed 0.7% to $86.86 a barrel, the lowest since January 10. 

Chinese Demand

Asian stock indices rose today, led by Chinese stocks on prospects that protests might lead to reduced Covid 19 restrictions. 

Such rare protests are a clear vote against President Xi Jinping's policies on zero tolerance for Covid 19 according to analysts, and the clearest challenge to his rule so far.

OPEC+ 

OPEC+ countries are expected to convene soon in December, with analysts estimating that weaker demand from China could nudge OPEC+ to cut output once more.

On other news, initial US data on crude inventories will be released today, expected to show a drawdown for the third week in a row, while tomorrow, official data will be released.