Oil records the highest level in 3 weeks due to the easing of Covid restrictions in China

Oil hit a three-week high on Tuesday after the latest easing of COVID-19 restrictions in China spurred hopes of a recovery in fuel demand and additional support from a cut in energy production in the United States due to winter storms.

The National Health Commission said on Monday that China will exempt all arrivals from quarantine measures from January 8, in a major step towards easing restrictions on the borders that have been largely closed since 2020.

Brent crude rose 22 cents, or 0.3 percent, to $84.14 a barrel by 0911 GMT, while US West Texas Intermediate crude rose seven cents to $79.63 a barrel. Both benchmarks earlier in the session hit their highest levels since Dec. 5.

The British and US markets were closed on Monday for the Christmas holidays.

As of Friday, about 1.5 million barrels of daily production capacity had been shut down at refineries on the US Gulf Coast while oil and gas production from North Dakota to Texas suffered from the freeze, curtailing output.