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Title: Oil prices slip as China cuts import quotas

Dec 30, 2021 03:21AM ET

By: AnalysisWatch

Oil prices slipped on Thursday after the world's biggest importer, China, cut the first tranche of crude imports for 2022, offsetting the impact of US data showing fuel demand had held steady despite rising Omicron coronavirus infections.

Brent crude futures fell 41 cents, or 0.5%, to $78.82 a barrel at 0755 GMT, the first drop in four days. After rising for six straight sessions, US West Texas Intermediate (WTI) crude futures fell 33 cents, or 0.4 percent, to $76.23 per barrel.

Oil prices pared earlier gains after China, the world's biggest crude importer, cut its first set of 2022 import quotas for mostly independent refiners by 11% below the comparable quota a year earlier, industry sources said.

Data on Wednesday showed crude stocks fell by 3.6 million barrels in the week to December 24, which was more than analysts polled by Reuters had expected.

Gasoline and distillate stocks also fell, contrary to analysts' forecasts, suggesting demand remained strong despite the COVID-19 record in the United States.

Oil prices were also supported by government measures to limit the impact of the record COVID-19 cases on economic growth, such as easing testing regulations.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, will meet on January 4th to decide whether to increase output further in February.

Saudi Arabia's King Salman said on Wednesday that the OPEC+ production deal was necessary for the stability of the oil market and that producers must abide by the agreement.

Global oil prices have risen 50% to 60% in 2021 as fuel demand has returned to near pre-pandemic levels and OPEC+ producers have sharply cut production for most of the year to eliminate the supply glut that has been weighing on the market.

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