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Title: Oil extends gains on Russia gas tension, China stimulus hopes

Apr 27, 2022 02:45AM ET

By: AnalysisWatch

Oil prices rose further on Wednesday amid rising geopolitical tensions after Russia cut gas supplies to Bulgaria and Poland, while hopes of a Chinese economic stimulus boosted demand prospects.

Brent crude futures were up 67 cents, or 0.6%, to $105.66 a barrel by 02:36 AM ET. West Texas Intermediate crude futures in the United States rose 44 cents, or 0.4 percent, to $102.14 per barrel.

In volatile trading, oil prices settled about 3% higher on Tuesday as the market was torn between supply and demand concerns over disruptions to oil and gas supplies from Russia and a deteriorating global economic outlook.

Because of that dispute, ultra-low-sulfur diesel futures contracts on the NYMEX rose more than 9% to a record $4.47 a gallon on Tuesday.

The International Monetary Fund (IMF) warned Tuesday that Asia faces a "stagflationary" outlook as the war in Ukraine, rising commodity costs, and a slowdown in China create significant uncertainty.

China's central bank said on Tuesday it would increase its cautious monetary support for the economy as Beijing seeks to combat an emerging COVID-19 epidemic in the capital and stave off an equally crippling citywide lockout that has enveloped Shanghai for a month. Any stimulus would boost oil demand.

Despite extended closures in Asia's biggest aviation market, demand for domestic flights in China has recovered and airline capacity this week reached its highest level since 2022, travel data company OAG said on Tuesday.

On the supply side, U.S. government data on crude oil inventories is due later Wednesday. Industry data released Tuesday showed U.S. crude oil and distillate inventories rose last week, while gasoline inventories fell.

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