Oil continued to grow in U.S. session
2022.12.19 10:40
Oil continued to grow in U.S. session
Budrigannews.com – Oil prices increased on Monday in response to the announcement that the Biden administration will replenish its strategic reserve and the rekindled hope that China’s economic reopening will result in increased demand in the coming year.
Futures were trading at $75.98 a barrel at 09:10 ET (14:10 GMT), while the contract was up 1.9% to $80.51 a barrel.
After easing some of its restrictions on mobility in response to public unrest, China, the world’s second-largest economy and largest crude importer, is experiencing an increase in COVID cases.
However, fuel demand is already rising, as evidenced by recent road and air transport metrics, and Chinese authorities have hinted at a more growth-friendly stance in the new year.
A senior Chinese Communist Party official was quoted as saying on Saturday that China’s economic output is likely to exceed 120 trillion yuan ($1 = 6.9735 yuan) this year.
Over and above the 3% growth seen in the first three quarters of the year, this would amount to roughly a 4.9% increase in gross domestic product.
The news on Friday that the government of the United States is planning to replenish its strategic reserves, initially purchasing 3 million barrels of oil after reducing the Strategic Petroleum Reserve to its lowest level in nearly 40 years in an effort to halt this year’s rise in fuel prices, helped set the tone.
However, as a result of concerns that aggressive monetary tightening to combat high inflation will result in a global recession in 2023, crude prices are currently trading around their lows for the year. Russia’s invasion of Ukraine in February wiped out all of the year’s enormous gains.
As a result of the bloc’s heads of government making it a priority at their summit meeting last week, European Union Energy Ministers are meeting in Brussels on Monday to discuss a proposal to cap natural gas prices.
More European gas problems haven’t started yet
According to Bloomberg, ministers will discuss a new proposal to impose a price cap of 180 euros per megawatt-hour after just three days of gas futures trading above that price. On February 1, it would come into effect.
