Oil prices rise in Asian trading session
2022.12.19 02:38
Oil prices rise in Asian trading session
Budrigannews.com – Markets bet on a demand recovery fueled by China’s economic reopening, and the Biden administration’s pledge to begin refilling its strategic reserve also brightened the outlook for prices on Monday, which saw oil prices recover from steep losses in the previous session.
After a year of COVID-19 lockdowns, several Chinese officials, including President Xi Jinping, battered the world’s second-largest economy, which was buoyed by crude markets.
Recent road and air transport metrics indicate that fuel demand is already rising, and the nation has begun to relax several anti-COVID measures.
However, China is also dealing with a significant increase in COVID-19 infections, which, according to analysts, could cause market volatility given the conflicting signals regarding an economic reopening.
By 21:37 ET (02:37 GMT), London-traded rose 1% to $80.04 a barrel and 1.3 percent to $75.44 a barrel. After experiencing sharp declines in recent sessions as a result of worries about a possible recession in 2023, both contracts were still trading close to their one-year lows.
However, a buy signal for the markets came in the form of a promise made by the United States government that it would begin replenishing its Strategic Petroleum Reserve (SPR) in February. Friday, the Biden administration said that it will buy 3 million barrels of oil at first and also buy crude at fixed prices.
In an effort to contain rising fuel prices this year and bring them to their lowest level in nearly 40 years, the United States government drew heavily from the SPR. Additionally, the Biden administration had indicated that it would begin replenishing the reserve at lower crude prices.
A tremor in West Texas, the country’s greatest oil-creating district, likewise increase fears of fixing U.S. rough stockpile, which helped costs. Additionally, increased demand for crude could support crude prices in the near future, as forecasts point to a winter that will be colder than anticipated.
Despite this, markets were concerned that rising interest rates and high inflation would lead to a recession in 2023, which is why crude prices were almost flat for the year. Last week, crude markets were shaken by a slew of hawkish signals from major central banks, including the and indicating that interest rates will continue to rise in the near future.
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China’s sluggish economic data also revealed the country’s long road to recovery, which may indicate a sluggish recovery in demand.
