Oil prices rose earlier in the week as investors weighed on a weaker dollar in the face of tight product markets and concerns about global growth.
West Texas Intermediate rose ড 111 a barrel after four weekly gains, the longest run since February. Gasoline and diesel prices rose to record highs before the start of the US driving season, which began in about a week. Money managers have also raised bullish unpaid bets.
In comments made over the weekend, Saudi Arabia indicated that it would support Russia’s role in the producers’ OPEC + group, undermining US-led efforts to isolate Moscow over its attack on Ukraine, the Financial Times said. Energy Minister Prince Abdul Aziz bin Salman told the newspaper that the state was hoping to reach an agreement with OPEC + which would include Russia.
Oil prices have risen this year due to rising demand and a complex global downturn from Russia’s invasion. Rising energy costs have contributed to massive inflation, prompted central banks to raise rates and slowed investor concerns. At the same time, hitting Asia’s largest economy, China has imposed multiple painful lockdowns to stem the Kovid-19 outbreak.
An additional withdrawal for the crude product could come from a weaker dollar, making the product cheaper for other currency holders. The greenback was lower on Monday after falling 1.4% last week, the highest since November 2020.
“Between the soft-dollar background and the China-reopening trade, this is favorable for oil,” said Stephen Ines, managing partner at SPI Asset Management Pte. As the U.S. moves into the summer driving season, the focus will be on a ramp-up in refinery production, he added.
The picture is mixed across China. In Shanghai, officials set criteria for classifying parts of commercial centers as low-risk for Covid-19 because they want to end a two-month lockdown, with no new cases reported outside of quarantine. Beijing, however, has reported a record number of cases, reviving concerns that the capital could face a lockdown.
Oil markets remain in recession, a bullish pattern characterized by near-term prices of long-term upside transactions. The difference between WTI’s closest two December deals for this year and 2023 was around 13 13 a barrel, up from about 11 11 a month a month ago.
Nevertheless, according to a Bloomberg Intelligence view, oil ceiling could be around $ 110 per barrel in light of China’s flagship demand, boosting economic growth from Beijing’s efforts to suspend Covid-19. Bloomberg Economics lowered its full-year China growth forecast from 5.7% to 2%.
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