SULAIMANI (ESTA) — Oil prices climbed on Tuesday as fears of a demand downturn in China eased after Shanghai relaxed some COVID-19 related restrictions, and OPEC warned it would be impossible to increase output enough to offset lost Russian supply.
Brent crude futures were up $1.72 to $100.20 a barrel, and U.S. West Texas Intermediate contracts were up $1.76 to $96.05 a barrel at 0625 GMT.
Both contracts had settled down around 4% on Monday.
Shanghai said on Monday that more than 7,000 residential units had been classified as lower-risk areas after reporting no new infections for 14 days, and its districts have since been announcing which specific compounds can be opened up, according to Reuters.
“Market sentiment is in see-saw mode, both on the supply and the demand front,” Reuters quoted Vandana Hari, founder of oil market analysis provider Vanda Insights, as saying.
The partial easing of Shanghai lockdowns lifted some of the downward pressure that was starting to be felt on worries about Chinese oil demand, she said.
The European Union is drafting proposals for an EU oil embargo on Russia in the wake of its invasion of Ukraine, some foreign ministers said on Monday, Reuters reported.
However, there is currently no agreement among members on crude from Russia, which calls its actions in Ukraine a “special operation”.
Tuesday’s rise in oil markets also followed a warning from the Organization of the Petroleum Exporting Countries (OPEC) that some 7 million barrels per day of Russian oil and other liquids exports could be lost due to sanctions or voluntary actions, and that it would be impossible to replace those volumes.
(Esta Media Network/Reuters)