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LONDON: Oil prices rose on Wednesday on expectations that easing COVID-19 restrictions in China will boost demand and as supply concerns grew.

Brent crude was up $1.69 cents, or 1.5 percent, at $113.62 a barrel at 1150 GMT, while US West Texas Intermediate (WTI) crude climbed $2.26 cents, or 2 percent, to $114.66 a barrel, reversing some of the previous session’s losses.

Hopes of further lockdown easing in China boosted expectations for demand recovery. The country’s authorities allowed 864 of Shanghai’s financial institutions to resume work, sources said on Wednesday, a day after the Chinese city achieved a milestone of three consecutive days with no new COVID cases outside quarantine zones.

And China has relaxed some COVID test rules for US and other travelers.

The market also saw support from rising supply concerns. Russian crude output in April fell by nearly 9 percent from the previous month, an internal OPEC+ report showed on Tuesday, as Western sanctions on Moscow following its invasion of Ukraine hit the top oil producer.

The price rise is being capped by reports that the US is planning to relax sanctions against Venezuela and allow Chevron Corp. to negotiate oil licenses with Venezuela’s national producer.

“Though this will bring little relief to the market in the short term, it would nonetheless be a first step toward ensuring that more oil could reach the market in future from currently sanctioned countries,” Commerzbank analyst Barbara Lambrecht said.

The European Union’s failure to persuade Hungary to lift its veto on a proposed embargo on Russian oil is adding price pressure, although some diplomats expect agreement on a phased ban at a summit at the end of May.

The EU intends to mobilize up to 300 billion euros ($315 billion) of investments by 2030 to end its reliance on Russian oil and gas, European Commission President Ursula von der Leyen said on Wednesday.

“In the meantime, the oil market will likely take its cues from today’s EIA update concerning US oil stocks,” PVM analyst Stephen Brennock said.

US crude and gasoline stocks fell last week, according to market sources citing American Petroleum Institute figures on Tuesday.

For the economic outlook, US Federal Reserve Chairman Jerome Powell on Tuesday said the central bank would ratchet up interest rates as high as needed to stifle inflation that he said threatened the foundation of the economy.

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