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Crude oil futures closed higher on Monday (June 13), supported by the view that global supply remains tight. On the other hand, concerns are rising that China’s return to control measures against COVID-19 in Beijing will hurt domestic oil demand.
- WTI crude futures were up 26 cents, or 0.2%, at $120.93 a barrel.
- BRENT crude futures were up 26 cents, or 0.2%, at $122.27 a barrel.
A UBS analyst said that oil prices were driven by tight supply in the market. OPEC and OPEC+ are not able to increase oil production according to the agreement because some countries have production problems.
In addition, the European Union’s ban on Russian oil imports will further tighten global oil supplies in the coming months.
On the other hand, Beijing announced a lockdown in Chaoyang, Beijing’s most populous district, and ordered mass tests for COVID-19. The measures raised concerns that economic activity and demand for oil in China could weaken.
In addition, the trading atmosphere in the oil market was also weighed down by fears that the U.S. economy is facing a recession as the Federal Reserve (Fed) may accelerate interest rate hikes.
Investors are paying attention to the weekly U.S. crude oil inventory report, which the EIA will release tomorrow.
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Tuesday, June 14, 2022