Image: Reuters Berita 24 English - On Monday, oil prices continued to rise, supported by a weaker currency and limited supply that countere...
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| Image: Reuters |
Berita 24 English - On Monday, oil prices continued to rise, supported by a weaker currency and limited supply that countered worries about the economy and the possibility of widespread COVID-19 lockdowns in China decreasing fuel demand.
After rising by 2.1 percent on Friday, Brent crude futures for September settlement increased by 69 cents, or 0.7 percent, to $101.85 a barrel by 0421 GMT.
After rising 1.9 percent in the previous session, U.S. West Texas Intermediate (WTI) crude futures for August delivery dipped 27 cents, or 0.3 percent, to $97.86 a barrel.
On Monday, the U.S. dollar declined from multi-year highs, helping to maintain the prices of commodities like gold and oil. Dollar-denominated goods are more affordable for owners of other currencies when the dollar is lower.
On concerns that a recession may affect oil demand, Brent and WTI saw their largest weekly declines in roughly a month last week. This week, widespread COVID testing exercises continued in parts of China, raising concerns about the country's oil demand as the world's second-largest oil user.
Oil supplies, however, continued to be limited, sustaining prices. As was to be expected, US President Joe Biden's visit to Saudi Arabia produced no commitment to increase oil production from the top OPEC producer.
To help control oil prices and lower inflation, Biden wants Gulf oil companies to increase output.
Senior U.S. State Department energy security advisor Amos Hochstein stated on CBS' Face the Nation on Sunday that the trip would cause oil producers to take "a few more steps" in terms of supply, though he did not specify which country or countries would increase output.
The U.S. has apparently signalled a projected gradual increase in supply, according to Baden Moore, head of commodities research at the National Australian Bank, even though there have been no immediate promises for additional oil output.
"If not more than around 1 million barrels per day, the winding down of SPR releases from November may offset this incremental supply," the statement continued.
As their current output accord ends in September, the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, will be meeting on August 3 and will be widely observed.
This week, attention is being paid to the restart of Russian gas exports to Europe through the Nord Stream 1 pipeline, which is due to finish its scheduled maintenance on July 21. Governments, markets, and businesses worry that the shutdown would last longer due to the conflict in Ukraine.
Germany, the fourth-largest economy in the world, would be severely impacted by the loss of that gas, increasing the risk of a recession.
Separately, on the margins of a gathering of the heads of finance of the Group of 20 major economies, U.S. Treasury Secretary Janet Yellen said on Saturday that she had fruitful discussions with a number of nations regarding a proposed price ceiling on Russian oil.
According to China's commerce ministry, Yellen brought up the price ceiling concept during a virtual meeting with Vice Premier Liu He on July 5.
The ministry has stated that putting a restriction on the price of Russian oil is a "very complicated problem" and that encouraging peace discussions between the relevant parties is a requirement for resolving the Ukraine conflict.
