Crude oil futures closed higher on Monday (May 16) following reports that Shanghai plans to end its lockdown measures. This gives investors confidence that Chinese oil demand will recover.
- WTI crude futures were up $3.71, or 3.4%, at $114.20 a barrel.
- BRENT crude futures were up $2.69, or 2.4%, at $114.24 a barrel.
The Shanghai Municipal Government announced yesterday that the lockdown measures will end on June 1 so that people can resume their normal lives. The lockdown measures, which lasted more than six weeks, have severely affected the economy.
Shanghai also allowed some stores to reopen as of Monday, May 16, including department stores, supermarkets, pharmacies, and hair salons, which were asked to properly manage these stores and limit the number of users to curb the spread of COVID-19.
The fruit and vegetable market may also be operated. However, it must be subject to the “do not touch” requirement for commercial transactions. The return of Shanghai workers to their workplace must be in a closed system. This means that these people cannot return home, but must stay at work temporarily.
Investors are waiting for the weekly report on U.S. crude oil inventories, which the EIA will publish tomorrow.
The Spot Market is Open
Tuesday, May 17,2022