Oil prices rise Wednesday on hopes of additional Chinese stimulus and announcements by Russian of halted gas supplies to Poland and Bulgaria, writes Reuters.

A barrel of European benchmark crude Brent costs USD 105.43 Wednesday morning against USD 103.66 Tuesday afternoon. US counterpart West Texas Intermediate trades concurrently at USD 101.95 against USD 99.97 Tuesday afternoon.

Russia is stoking geopolitical tension after announcing a complete halt of gas supplies to Poland and Bulgaria Wednesday.

”Oil is supported via the escalation of geopolitical tensions. Cutting gas flows is not new news, but it’s the timing of Russia plugging the gas flows when stagflationary fears are running rampant again,” says Stephen Innes, managing partner of SPI Asset Management, to Reuters.

Oil prices are further buttressed by hopes of additional economic stimulus in China.

Tuesday, the Chinese central bank announced monetary policy to support its economy, especially smaller firms affected by recent Covid-19 outbreaks. Moreover, the move is meant to ensure sufficient liquidity and a stable development in financial markets.

Shanghai has been in lockdown mode for several weeks to contain the spread of Covid-19, while mass testing has been expanded to a large part of the city and the market, with residents placed in lockdown like in Shanghai.

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