Ana sayfa » Oil prices settle higher on mild U.S. inflation data

Oil prices settle higher on mild U.S. inflation data

Preparing for weekly drop due to COVID concerns in China

by BUNKERIST

Oil prices rose after milder-than-expected US inflation data reinforced hopes the Fed will slow rate hikes and increase chances of a soft landing for the world’s largest economy.

As a matter of fact, Rising COVID-19 cases in China, the largest oil importer, have fueled fears of weak fuel demand and prices are on their way to a weekly decline.

Brent crude futures rose 21 cents, or 0.2%, to $93.88 a barrel at 0500 GMT, extending the 1.1% gain in the previous session. West Texas Intermediate (WTI) crude futures rose 22 cents, or 0.3%, to $86.69 a barrel, after rising 0.8% in the previous session.

However, prices were headed for weekly decreases of more than 4% amid rising US oil inventories and fears of weakening demand in China as Beijing adheres to its zero-COVID strategy.

China’s caseload hit its highest level since the quarantine in Shanghai earlier this year, while Chinese authorities increased quarantines and other restrictions to curb the spread of the virus. Both Beijing and Zhengzhou reported record numbers of daily cases.

This could temporarily keep oil market bullishness in check while the embargo on Russia approaches, as traders are hypersensitive to lockdowns on the world’s largest oil importer.

Travel has been suppressed across China as people avoid the risk of quarantine while working from home is increasing, which reduces mobility and fuel demand.

Hopes that China will loosen its zero-COVID policy revived the oil market last week, but comments from health officials this week made it clear that its determination to fight the epidemic will remain.