Tuesday saw a little increase in oil prices thanks to a weaker dollar and a US intention to replenish its oil stocks, but gains were limited by concerns about the effects of an increase in Covid-19 cases in China, the world’s largest oil consumer.
At 0402 GMT, Brent crude futures were up 24 cents, or 0.3%, to $80.04 a barrel, following a session-high rise of 76 cents.
US West Texas Intermediate (WTI) oil futures increased by 49 cents, or 0.7 percent, to $75.68 a barrel following a session-high increase of 90 cents.
Following this year’s unprecedented release of 180 million barrels from the stock, the US stated this week that it will purchase up to three million barrels of oil for the Strategic Petroleum Reserve.
At 0402 GMT, Brent crude futures were up 24 cents, or 0.3%, to $80.04 a barrel, following a session-high rise of 76 cents.
US West Texas Intermediate (WTI) oil futures increased by 49 cents, or 0.7 percent, to $75.68 a barrel following a session-high increase of 90 cents.
Following this year’s unprecedented release of 180 million barrels from the stock, the US stated this week that it will purchase up to three million barrels of oil for the Strategic Petroleum Reserve.
Prices have also been supported by a depreciating dollar, which has reduced the cost of oil for holders of foreign currencies.
Analysts noted that for prices to increase further, there must be demonstrable indicators of rising demand.
Given the conflicting indications surrounding China’s reopening, the oil demand outlook will be crucial in determining how high crude prices might rise, according to Oanda analyst Edward Moya.
Tina Teng, an analyst at CMC Markets, noted that although China has been easing pandemic restrictions, the rise in Covid-19 cases has been negative for the oil markets due to concerns about the nation’s economic recovery.
A study conducted by World Economics on Monday revealed that business confidence in China had dropped to its lowest level since January 2013, showing the impact of an increase in Covid-19 infections on economic activity after the nation relaxed pandemic control efforts.
Fears of a global recession were outweighing supply problems as well as other factors, according to Teng.
An early Reuters poll released on Monday indicated that while US crude oil inventories were anticipated to have increased last week, gasoline and distillate inventories were predicted to have decreased by approximately 200,000 barrels.
The survey was done ahead of reports due on Tuesday from the American Petroleum Institute and on Wednesday from the US Department of Energy’s statistical arm, the Energy Information Administration.