Title: Oil's Bull Run rolls on despite possible China reserves release

Jan 14, 2022 06:57AM ET

By: AnalysisWatch

Oil futures rose on Friday, on track for a fourth weekly gain, helped by supply constraints and a weaker dollar, despite sources saying China will release crude reserves around the New Year.

At 1125 GMT, Brent crude futures rose $1.16, or 1.4%, to a two-and-a-half-month high of $85.63 a barrel. US West Texas Intermediate crude rose $1.06, or 1.3%, to $83.18.

Crude prices turned higher as the dollar headed for its biggest weekly decline in more than a year. A weaker dollar makes commodities more affordable for holders of other currencies.

Several banks have forecast oil prices at $100 a barrel this year as demand is expected to outstrip supply, not least as OPEC+ countries' capacity constraints come into focus.

However, sources told Reuters news agency that China plans to release its oil reserves around the Lunar New Year holidays between January 31 and February 6, as part of a plan coordinated by the United States with other major consumers to bring down global prices.

The US Energy Department said on Thursday it had sold 18 million barrels of strategic crude.

China also saw its first annual drop in crude imports in two decades, although traders expect imports to recover this year.

There were also concerns about fuel demand in the world's second-largest oil consumer as the variant Omicron coronavirus spread to the cities of Dalian and Tianjin.

Many cities, including Beijing, have asked people not to travel during the New Year holiday, which could reduce demand.