Oil stable near $100 a barrel as dollar weakens

(Representative image)

Oil prices were stable on Monday, close to $100 a barrel as support from a weaker dollar and recovering Chinese crude imports met renewed demand concerns linked to China's stringent COVID containment approach.

Brent crude futures were down 1 cent, or 0.1%, to $98.56 a barrel at 1444 GMT. U.S. West Texas Intermediate crude rose by 4 cents, or 0.04%, to $92.65.

Both contracts dropped by more than $1 a barrel earlier in the session after Chinese health officials at the weekend reiterated their commitment to strict COVID containment measures, dashing hopes of a rebound in oil demand from the world's top crude importer.

Brent and WTI rose last week, climbing 2.9% and 5.4%, respectively on speculation about a possible end to COVID-19 lockdowns despite the lack of any announced changes.

However, prices pared gains on stronger risk sentiment, news of recovering Chinese crude imports and the U.S. dollar weakening against other currencies, UBS analyst Giovanni Staunovo said.

Both contracts remain well above $90 a barrel, with Brent hovering nearer $100.

The U.S. dollar sank against the euro on Monday and sterling was supported by risk-on sentiment and a rally in European stock markets.

While China's imports and exports contracted unexpectedly in October, its crude oil imports rebounded to the highest level since May.

Oil prices have also been underpinned by expectations of tighter supplies when the European Union's embargo on Russia's seaborne crude exports starts on Dec. 5, even though refineries worldwide are ramping up output.

U.S. oil refiners this quarter will run their plants at breakneck rates, near or above 90% of capacity. China's largest private refiner Zhejiang Petroleum and Chemical Co (ZPC), meanwhile, is raising diesel output.

Kuwait Integrated Petroleum Industries Co (KIPIC) said on Sunday the first phase of its Al Zour refinery had started commercial operations, the KUNA state news agency reported.