Oil prices rose on Monday, driven by a weaker dollar and concerns about tight supply. This offset concerns about a recession and the likelihood of a widespread lockdown in China over COVID-19.
- Brent crude futures were up $2.44, or 2.4%, to $103.60 a barrel.
- WTI crude futures were up $2.17, or 2.2%, to $99.76.
The U.S. dollar fell from a multi-year high on Monday, supporting the prices of commodities such as gold and oil. A weaker dollar makes dollar-denominated commodities cheaper for holders of other currencies.
U.S. President Joe Biden’s trip to Saudi Arabia did not yield any commitments from OPEC’s leading producers to increase oil supply.
Biden wants Gulf oil producers to increase production to lower oil prices and reduce inflation.
Global markets are focused on the restart of Russian gas flows to Europe through the Nord Stream 1 pipeline, whose maintenance is scheduled to end on July 21, with markets concerned that the shutdown could widen further due to Europe’s standoff with Moscow.
“Oil is opening the week softer as the market digests the demand impact of the rise in new COVID cases in China and as the market cautiously awaits the monumental event risk if Nord Stream 1 gas flow from Russia to Europe will resume later this week,”SPI Asset Management managing partner Stephen Innes told Reuters.
If energy shortages occur in Germany, this will hit the fourth-largest economy hard and possibly trigger a recession.
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Monday, July 18, 2022