Oil prices rebounded from a sharp decline following concerns over Chinese demand
Oil prices opened slightly higher on Tuesday after falling sharply in the previous session following COVID’s ongoing concerns:
Oil prices opened slightly higher on Tuesday, after falling sharply in the previous session following concerns that the continued closure of COVID-19 in China would hurt demand and when the US dollar rose to a two-year high.
Brent crude futures were at $ 102.57, up 25 cents, or 0.2 percent and the U.S. West Texas Intermediate contract rose to $ 98.70, up 16 cents, or 0.2 percent at 0002 GMT.
Both contracts were down about 4% on Monday, with Brent down $ 7 a barrel in the session and WTI down about $ 6 a barrel.
In China sanctions to fight COVID in Shanghai have dragged on into their fourth week. Meanwhile, orders for large-scale testing, including in Beijing’s largest shopping district, have raised concerns over other Shanghai-style closures.
“The impact of China’s closure is over a million barrels a day and tests on 12 counties over the next five days will determine the next major step for crude oil prices,” wrote Edward Moya, a senior market analyst for OANDA in a note.
The US dollar also hit a two -year high on Monday, making oil more expensive for holders of other currencies.
“Supply concerns are not a major focus for energy traders, and now you have a soaring dollar that adds extra pressure on all commodities,” said Moya of OANDA.
(Reporting by Liz Hampton in Denver; Editing by Kenneth Maxwell)
