Singapore, November 22 (BNA): Oil prices rose on Tuesday as the dollar weakened, but fears of a global recession and concerns about rising numbers of coronavirus cases in China weighed on demand from the world’s largest importer of crude oil weighed on sentiment.
Brent crude futures rose 44 cents, or 0.5 percent, to $87.89 by 0513 GMT. US West Texas Intermediate (WTI) crude futures began trading on Tuesday, up 30 cents, or 0.4%, at $80.34 a barrel, Reuters reported.
The Organization of the Petroleum Exporting Countries (OPEC+) and its allies (OPEC+) recently cut production targets and the energy minister of Saudi Arabia, the de-facto leader, said this month that the cartel would remain cautious about oil production due to uncertainty about the global economy.
CMC Markets analyst Tina Teng said the dollar’s decline was the main factor supporting oil prices after Monday’s rebound. A weak dollar makes oil cheaper for holders of other currencies.
Concerns about oil demand amid US Federal Reserve rate tightening and China’s aggressive COVID-lockdown policies outweigh potential positive price drivers such as the European Union’s embargo on Russian oil set to begin on December 5, Stephen Innes, managing partner at SPI Asset Management, said in a statement. note.
But meanwhile, a fresh rise in coronavirus cases nationwide has deepened concerns about its economy.
Beijing closed parks and museums on Tuesday and more Chinese cities resumed mass testing. On Monday, the Chinese capital warned that it was facing its most severe testing from the epidemic and tightening rules for entering the city.
A preliminary Reuters poll showed on Monday that crude oil inventories in the United States fell by about 2.2 million barrels in the week ending November 18th.
The spread of Brent crude futures to the front month contracted sharply last week, while WTI flipped to a forward position, indicating easing supply concerns.
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