Price action

West Texas Intermediate crude for February delivery
CL.1,
+0.38%
 
CL00,
+0.38%
 
CLG23,
+0.38%
rose $1.09, or 1.4%, to $80.65 a barrel on the New York Mercantile Exchange.

February Brent crude
BRNG23,
+0.76%,
the global benchmark, was up $1.29, or 1.5%, at $85.21 a barrel on ICE Futures Europe. March Brent
BRN00,
+0.58%
 
BRNH23,
+0.58%,
the most actively traded contract, gained $1.10, or 1.3%, to trade at $85.60 a barrel.

January gasoline
RBF23,
-0.52%
was up 0.1% at $2.385 a gallon, while January heating oil
HOF23,
+3.14%
rose 3.3% to $3.376 a gallon.

January natural gas
NGF23,
+2.07%
rose 1.2% to $5.138 per million British thermal units.

Market drivers

Russian President Vladimir Putin announced a ban on the sale of oil which would allow exports to countries imposing a price cap only in the case of a special exemption from the Kremlin.

See: Kremlin bans sale of Russian oil to countries that impose price cap

The long awaited move comes after the U.K. and European Union earlier this month banned imports of seaborne crude from Russia and as the EU and Group of Seven imposed a ceiling on Russian crude prices by barring companies from insuring, financing or shipping oil priced above $60 a barrel. Urals crude, Russia’s benchmark, trades at a steep discount to Brent crude, the global benchmark.

Crude oil prices were previously finding support to begin a holiday-shortened week after China on Monday took a step toward fully reopening the country to travel. U.S. and U.K. markets were closed Monday for Christmas holidays.

The National Health Commission said China would drop a quarantine requirement for passengers arriving from abroad effective Jan. 8. Arriving passengers currently must quarantine for five days at a hotel and then three days at home. Previously, incoming travelers had been required to quarantine as many as three weeks.

Broader loosening of China’s once stringent COVID-19 curbs has provided support for crude, which has bounced off nearly one-year lows set earlier this month. China’s COVID restrictions have been seen curtailing crude demand in 2022.

“Throughout 2022, China’s lockdown measures had often created acute, near-term demand declines, with the recent pivot causing some to increase their demand expectations for 2023,” said Robbie Fraser, manager of global research and analytics at Schneider Electric, in a note.

“Still, recession risk and rising interest rates remain a top concern for crude futures, and the potential for headwinds continues to challenge any attempt by prices to move higher,” he wrote.

Winter weather knocked out 1.5 million barrels a day of production at refineries on the U.S. Gulf Coast Friday, Reuters reported, though the outages were expected to be short-lived.