Oil rises, but uncertainty about the outbreak of Covid in China limits gains

Oil prices rose in early trading on Tuesday, supported by a weaker dollar and the United States’ plan to rebuild its strategic reserves, but gains were limited by uncertainty over the impact of rising COVID-19 cases in China, the world’s largest oil importer.

Brent crude futures rose 61 cents, or 0.8 percent, to $80.40 a barrel by 0124 GMT.

US West Texas Intermediate crude futures rose 65 cents, or 0.9 percent, to $75.84 a barrel, after rising 90 cents in the previous session.

The market received support from the US plan, which was announced last week to buy up to three million barrels of oil for the strategic reserve, after the United States this year released 180 million barrels of storage, which is a record.

A weaker US dollar has also supported prices as it makes oil cheaper for holders of other currencies. The dollar index reached about 104.7.

But for prices to rise further, analysts said there would need to be clear signs of increased demand.

On Tuesday, China recorded a jump in new confirmed cases of coronavirus, to 2,722 on December 19, up from 1,995 the previous day. However, there is growing skepticism about whether the official tally captures the true number of infections, with anecdotal evidence suggesting that the disease is spreading in cities.