Oil rose in New York on optimism over China’s recovery from a virus-led demand crash and with the U.S. set to avoid a national lockdown to curb the spread of Covid-19.
China’s oil processing rebounded in October to match a record, as the world’s largest importer continues to lead the recovery in consumption. Indian fuel usage also posted a year-on-year increase in October, for the first time since February.
Oil capped its biggest weekly advance since early October on Friday after news of a breakthrough on a Covid-19 vaccine. Though Europe’s demand is wavering as lockdowns re-emerge, the U.S. said it will target local measures rather than a nationwide lockdown to tackle the spread of the virus. An OPEC+ committee will assess the health of the market on Tuesday, before a decision at the end of the month where a delay to an output hike is expected.
“The Brent curve structure continues to firm, global oil inventories continue to decline, a very promising vaccine is on the horizon” and OPEC+ will likely keep supporting the oil market, said Bjarne Schieldrop, chief commodities analyst at SEB AB.
China’s crude refining rose to 14.14 million barrels a day in October, matching a record set in June, as more plants processed oil to replenish inventories after a holiday demand boost. Meanwhile, total petroleum demand in India rose 2.7% last month—from a year earlier—the first annual increase since February.
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Though India’s fuel consumption was strong in October, it has pulled back slightly at the start of this month. Diesel sales were down 5.1% versus a year earlier, while gasoline was unchanged. There are still signs its crude purchasing is picking up though. Indian Oil Corp. has issued a raft of tenders to purchase West African oil in recent days, while its buying of Nigerian cargoes has gained, traders said.