Business

Oil prices rebound sharply as falling COVID cases in China fuel demand hopes

Oil prices surged on Wednesday, reversing a pre-session sell-off after signs of easing COVID cases in global growth engine China. At this point, global asset markets were waiting for a major update on US consumer price inflation.

price action
  • West Texas Intermediate Crude for June delivery CL00,
    +3.89%

    CLM22,
    +3.89%

    CL.1,
    +3.89%
    rose $4.06, or 4%, to $103.81 a barrel. On Tuesday, the contract on the New York Mercantile Exchange fell 3.2% to $99.76 a barrel after trading below $100 for the first time since April 27.

  • July Brent Crude Oil BRN00,
    +3.69%

    BRNN22,
    +3.69%,
    the global benchmark rose $3.75, or 3.7%, to $106.22 a barrel. The contract fell 3.3% to $102.46 a barrel on Tuesday on ICE Futures Europe.

  • June natural gas NGM22,
    +2.40%
    was up 2.5% to $7.572 per million British thermal units, after rising 5.1% on Tuesday and falling 12% on Monday.

  • June gasoline RBM22,
    +1.76%
    rose 1.9% to $3.609 a gallon during HOM22 fuel oil in June,
    +2.65%
    rose 2.6% to $4.0333 a gallon.

market leader

Oil prices are down more than 1% for the month of May so far and are down almost 6% this week. However, a rebound appeared to be underway for Wednesday as investors welcomed news of falling COVID cases in Shanghai and a low number of cases in Beijing.

Movement restrictions in China imposed by a “zero-COVID” policy have fueled concerns over a slowdown in growth at the world’s largest crude oil importer. This is because supply worries are a constant backdrop to the commodity.

Morgan Stanley analysts forecast that Brent oil will hit $130 a barrel by the end of 2022, while US oil will hit $120, noting that fundamentals for the commodity remain strong.

Meanwhile, some analysts said the disruption of a gas pipeline in Ukraine to Russian supplies flowing to European households was a concern and might improve the overall backdrop for energy prices.

However, the Ukrainian pipeline operator said it would use a different hub without affecting flow, although Russia’s state-owned oil company Gazprom said gas shipments were down 25% from the day before it was transported through Ukraine, according to a report from Associated Press. The two countries have been at war since Russia invaded in late February.

Elsewhere, investors are awaiting US consumer price data, which are expected to fall to 8.1% on an annualized basis in April from 8.6% in March, according to a survey of economists from Dow Jones and The Wall Street Journal. US stock futures ES00,
+1.16%

YM00,
+0.92%
were also higher prior to this date.

https://www.marketwatch.com/story/oil-prices-rebound-strongly-as-falling-china-covid-cases-drive-demand-hopes-11652269493?rss=1&siteid=rss Oil prices rebound sharply as falling COVID cases in China fuel demand hopes

Brian Lowry

InternetCloning is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@internetcloning.com. The content will be deleted within 24 hours.

Related Articles

Back to top button