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Oil steady as US production rises after freeze, China eases COVID brakes

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By Arathy Somasekhar

HOUSTON (RockedBuzz via Reuters) – Oil prices held steady after hitting a three-week high on Tuesday, as restarts of some U.S. energy plants shut down by winter storms offset gains from hopes of a demand recovery as China eases its COVID-19 restrictions.

Brent crude rose 41 cents, or 0.5%, to $84.33 a barrel, while US West Texas Intermediate crude fell 3 cents to $79.53 a barrel.

Both benchmarks hit their highest level since December 5 at the start of the session. The UK and US markets were closed on Monday for the Christmas holidays.

Refineries along the Gulf Coast have begun to resume operations and ramp up production after an Arctic blast sent well below freezing temperatures and led to losses of power, instrumentation and steam at facilities along the Gulf Coast. Gulf of the United States.

The cold also cut oil and gas production from North Dakota to Texas.

Production by about 450,000 to 500,000 barrels of oil per day was cut over the Christmas weekend at the Bakken oil fields, the North Dakota Pipeline Authority said, adding that operators are working quickly to restore lost production.

“The weather in the US is expected to improve this week, which means the rally may not last long,” said Kazuhiko Saito, chief analyst at Fujitomi Securities.

China will stop requiring incoming travelers to go into quarantine, effective Jan. 8, the National Health Commission said on Monday, an important step toward easing borders that have been largely closed since 2020.

“This is certainly something traders and investors have been hoping for,” said Avatrade analyst Naeem Aslam.

Russian President Vladimir Putin also signed a decree on Tuesday banning the supply of oil and petroleum products to nations participating in the Feb. 1 cap for five months. Concerns about a possible production cut by Russia also provided support to prices.

Russia could cut oil production by 5% to 7% in early 2023 in response to price limits, RIA news agency said on Friday, citing Deputy Prime Minister Alexander Novak.

(Reporting by Arathy Somasekhar in Houston and Alex Lawler in LondonAdditional reporting by Yuka Obayashi in Tokyo and Isabel Kua in SingaporeEditing by Louise Heavens, Matthew Lewis and Nick Macfie)