Oil rose for a second session as China’s new crude import quotas helped cut recent pessimism over demand. 

Benchmark Brent crude topped US$75 a barrel, while West Texas Intermediate hit US$70. The large batch of Chinese quotas added to an improved outlook for consumption in the world’s second-largest economy, a day after Beijing was said to be considering a broad range of measures to revive a flagging recovery.

The dollar also dropped, making commodities priced in the currency more attractive. Equities climbed in anticipation the U.S. Federal Reserve will announce a pause in its run of interest-rate hikes, which contributed to the bullish sentiment.

Crude has been largely rangebound since the start of May as stubbornly high Russian supplies and concern about global demand counteract Saudi-led OPEC+ efforts to curb production. Slowing U.S. inflation and stimulus in China have improved the market outlook in recent days, while America is planning to buy about 12 million barrels of oil this year to refill its depleted emergency reserves. 

“General level of risk appetite remains firm across markets,” said Ole Hansen, head of commodities strategy at Saxo Bank. Oil prices have gained in part thanks to the outlook for stimulus in China, he said. 

Prices:

• WTI for July delivery rose 0.9 per cent to US$70.05 a barrel at 10:06 a.m. in London.
• Brent for August advanced one per cent to US$75.05 a barrel.

There are, however, longer-term worries over demand. The growth in global oil use will taper off over the next few years as high prices and Russia’s invasion of Ukraine speed up the transition away from fossil fuels, the International Energy Agency said. Consumption in 2024 will increase at half the rate seen in the prior two years. 

The industry-funded American Petroleum Institute reported U.S. nationwide crude inventories expanded by one million barrels last week. Gasoline and distillate stockpiles, and supplies at the Cushing, Oklahoma storage hub also rose. Official data is due later Wednesday.