Oil settled mixed after hitting a 7-week high amid strong expectations for China

NEW YORK (Reuters) – Oil prices were mixed on Monday, falling as investors booked, jumping to a seven-week high on optimism about a possible recovery in demand from China, the largest oil importer, as the economy recovers this year. Pandemic lockdowns.

Brent crude closed up 56 cents at $88.19 a barrel. The highest price for the session was $89.09 a barrel, the highest level since December 1st, and US West Texas Intermediate crude closed down two cents at $81.62 a barrel, surpassing the session high of $82.64 a barrel, which is the highest level since December 5th. .

Prices fell towards the end of the session, said Phil Flynn, an analyst at Price Futures Group, as investors took profits.

Sukrit Vijayakar, director of Mumbai-based energy consultancy Trifecta, said the market still wants to hold long positions in case Chinese growth resumes.

The data shows a strong rebound in travel in China after the easing of COVID-19 restrictions, commodities analysts at ANZ said in a note, noting that road traffic congestion in the country’s 15 major cities so far this month has risen 22% from a year ago.

Crude oil prices in many physical markets in the general world started higher as China showed signs of further buying and traders worried that sanctions imposed on Russia could lead to a tightening of supplies.

“While reopening (China) will undoubtedly be complex, particularly during the holiday season, initial indications are that there will be a pickup in activity, which means the economy can do better,” said OANDA analyst Craig Erlam.

Erlam said Brent crude is expected to return to the $90-$100 range as the oil market tightens.

Flynn said demand for the products has pushed up the oil market and refining margins. The 3-2-1 crack spread, a proxy for refining margins, rose to $42.18 a barrel on Monday, the highest level since October.

The EU and Group of Seven (G7) alliance will put a price cap on Russian refined products from February 5, in addition to the Russian crude price cap in place since December and the EU’s ban on Russian crude imports by sea.

The Group of Seven agreed to postpone the review of the level of the Russian oil price ceiling to March, a month later than originally planned, to buy time to assess the impact of the price ceiling for oil products.

Government data showed today, Monday, that India’s crude oil imports rose to a five-month high in December, as refineries stockpiled discounted Russian fuel amid a steady increase in consumption in the country.

(Reporting by Stephanie Kelly in New York; Additional reporting by Ron Bousso in London, Mohi Narayan in New Delhi, and Sonali Paul in Melbourne; Editing by David Goodman, David Gregorio and Mark Potter

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