Brent Crude Prices recover losses and increase by about 3%, backed above $ 100

Brent Crude Prices recover losses and increase by about 3%, backed above $ 100

Oil rises as OPEC warns of scarce supply, China reduces COVID offices

The wild gyrates in rough markets continued Tuesday, with Brent oil prices trading nearly 3 percent higher and back above $ 100 after falling briefly below that level in the previous session.

Crude futures have seen the last few weeks, with the most volatility since June 2020.

Indeed, benchmark Brent crude was up 2.7 percent to about $ 101 per barrel after falling below the $ 100 per barrel mark on Monday, after falling for the second straight week. The US West Texas Intermediate Futures traded nearly $ 3 higher at about $ 97 per barrel.

Both contracts were about 4 percent lower on Monday.

Today’s moves were primarily driven by the news that China has relaxed some COVID restrictions to reduce concerns about demand, and as major oil-producing countries warned, Russia’s supply losses due to sanctions cannot be replaced.

“Market sentiment is in sea-saw mode, both on the supply and demand front,” Vandana Hari, founder of oil market analysis provider Vanda Insights, told Reuters.
She added that the partial easing of Shanghai’s closure eases some of the downward pressure arising from concerns over Chinese oil demand.

Tuesday’s rise comes from the threat of European Union oil embargoes on Russia, despite concerns about delivery, the record release of oil from emergency stocks.

The latest to weigh in on investor sentiment is a warning from the Organization of the Petroleum Exporting Countries (OPEC) that it would be impossible to replace the volumes of Russian oil and other liquid exports lost by sanctions or voluntary actions.

“The oil market is still vulnerable to a major shock if Russian energy is sanctioned, and that risk remains on the table,” wrote Edward Moya, a senior market analyst at OANDA, as reported by Reuters.

“Oil prices will play a key role here, as crude inventories remain low, but energy traders will struggle to shake off these steady announcements of new COVID restrictions in China,” he added.

Markets will also be keeping an eye on data on the U.S. Petroleum Institute’s crude oil inventories coming later on Tuesday.

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