Oil rallies as major US pipeline shuts because of a leak

Bloomberg

Oil snapped a four-day drop amid an outage on a major US pipeline and optimism over China’s reopening.
West Texas Intermediate climbed as much as 4.8% in New York, surpassing $75. The Keystone oil pipeline, which can haul more than 600,000 barrels a day of crude from Canada into the US, was halted after spillage into a creek. No timeline was given for its restart.
The shutdown compounded positive signals from China, where a rollback of Covid restrictions is brightening the prospects for demand.
Oil has weakened this month, erasing all of this year’s once-substantial gains, as central banks tighten monetary policy and the macroeconomic outlook sours. The pace of the selloff in recent weeks means that the global Brent benchmark is now oversold, one sign that the market rout could be nearing an end.
Until about a week ago, Chinese officials were still pledging to eliminate Covid-19 from the world’s largest crude-importing nation. But protests against the stringent rules seem to have hastened Beijing’s pivot away from a policy closely tied to President Xi Jinping.
Though sanctions on Russian crude have had little impact so far on the market, there’s a growing backlog of oil tankers near the Turkish Straits after an insurance wrangle prevented some vessels from passing through the country’s waters.
Meanwhile, Amos Hochstein, the US State Department’s senior energy security adviser, said that President Joe Biden’s administration is still weighing the impact of China’s reopening — and the price cap on Russian supplies — before moving to start replenishing the depleted Strategic Petroleum Reserve.