An aerial view shows Shibushi National Petroleum Stockpiling Base in Kagoshima prefecture, Japan January 18, 2019, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

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  • China cuts 1st batch of 2022 crude import quotas by 11% -sources
  • U.S. crude, fuel stocks fell last week; output rises -EIA
  • Saudi king says OPEC+ pact ‘essential’ for oil market stability

SINGAPORE, Dec 30 (Reuters) – Oil prices eased on Thursday after the world’s top importer China cut the first batch of crude import allocations for 2022, offsetting the impact of U.S. data showing fuel demand had held up despite soaring Omicron coronavirus infections.

Brent crude futures fell 41 cents, or 0.5%, to $78.82 a barrel at 0755 GMT, down for the first time in four days. U.S. West Texas Intermediate (WTI) crude futures slid 33 cents, or 0.4%, to $76.23 a barrel after six straight sessions of gains.

Oil prices pared earlier gains after China, the world’s top crude importer, lowered the first batch of 2022 import quotas to mostly independent refiners by 11% below the comparable year-earlier quota, industry sources said.

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“Market sentiment weakened on worries that the Chinese government could take stricter actions against the teapots,” a Singapore-based analyst said, referring to the independent refiners.

U.S. Energy Information Administration data on Wednesday showed crude oil inventories fell by 3.6 million barrels in the week to Dec. 24, which was more than analysts polled by Reuters had expected.

Gasoline and distillate inventories also fell, versus analysts’ forecasts for builds, indicating demand remained strong despite record COVID-19 cases in the United States.

Oil prices also drew support from steps taken by governments to limit the impact of record high COVID-19 cases on economic growth, such as easing testing rules. read more

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

Saudi Arabia’s King Salman said on Wednesday the OPEC+ production agreement was needed for oil market stability and that producers must comply with the pact. read more

Global oil prices have rebounded by between 50% and 60% in 2021 as fuel demand roared back to near pre-pandemic levels and deep production cuts by OPEC+ producers for most of the year erased a supply glut that has been weighing on the market. read more

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Reporting by Sonali Paul and Florence Tan; editing by Richard Pullin, Himani Sarkar and Barbara Lewis

Our Standards: The Thomson Reuters Trust Principles.

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