Oil prices moved to growth amid optimism
2022.12.12 10:08
Oil prices moved to growth amid optimism
Budrigannews.com – After a sharp selloff the week before, traders balanced supply woes with concerns about the outlook for the global economy, and oil prices edged higher on Monday.
Futures were up 1.6% at $72.14 a barrel by 09:30 ET (14:30 GMT), while the contract was up 1% at $76.82 a barrel.
Concerns about the impact of a possible global recession on oil demand caused both contracts to fall last week to their lowest levels since December 2021.
Helping the tone Monday was the news that the Cornerstone pipeline between the U.S. also, Canada stayed shut, taking steps to fix supply to the biggest shopper of rough on the planet.
TC Energy in Canada has no idea when it will resume supplying refineries in the Midwest and Gulf Coast of the United States with 622,000 barrels per day of heavy Canadian crude because it hasn’t found out what caused the pipeline leak.
In addition, Vladimir Putin, the president of Russia, issued a warning that his country might reduce its oil output in response to Western efforts to limit the price of the exports of the country.
Bloomberg data showed that almost all of the crude that was shipped from Russian ports last week was going to Asia. This means that Moscow has almost stopped being a source of crude oil for Europe since the EU banned Russian crude imports by sea on Dec. 5.
More Oil prices may recover due to China and Fed
Before Moscow invaded Ukraine, Europe had taken roughly half of the country’s supplies at the beginning of the year.
However, given that the Chinese government recently announced a sharp increase in admissions to the nation’s clinics, which suggests that the COVID-19 virus has spread rapidly since restrictions on mobility were eased at the beginning of the month, it is up for debate how long this upbeat mood will last.
Because of this, demand from the world’s largest importer and the country’s growth outlook for the next six months are becoming increasingly uncertain.
This occurs at the same time that the majority of the world’s leading central banks are considering raising interest rates in an effort to keep inflation under control. This could send the United States, the European Union, and the United Kingdom into recession next year.
Analysts at Citigroup decreased the average forecast for crude prices for the coming year by 10%, bringing them down to $80 per barrel.
The Energy Information Administration will release its monthly drilling productivity report later in this session, and OPEC will release their reports on Tuesday and Wednesday, respectively, this week.
