Oil prices staged New Year rally instead of stock market
2022.12.27 00:13
Oil prices staged New Year rally instead of stock market
Budrigannews.com – On Tuesday, concerns that winter storms across the United States are affecting energy production and China’s latest easing of COVID-19 restrictions boosted fuel demand pushed oil prices to three-week highs.
By 0253 GMT, the price of a barrel of U.S. West Texas Intermediate crude was $80.44 a barrel, up 88 cents, or 1.1 percent. Earlier in the session, the two benchmarks reached their highest levels since Dec. 5.
On Friday, Brent rose 3.6%, while WTI acquired 2.7%. Weekly gains on both benchmarks were the highest since October. For the Christmas holiday, the British and American markets were closed on Monday.
The National Health Commission announced on Monday that China will end its quarantine requirements for travelers entering the country on January 8, removing a rule that had been in place since the pandemic began three years ago. That fueled optimism regarding increased demand from the leading importer.
Tuesday saw a decline in the dollar as a result of this announcement. Oil is cheaper for holders of other currencies when the dollar is weak, which typically indicates a greater risk appetite on the part of investors.
On Christmas Day, a deadly blizzard paralyzed Buffalo, New York. It trapped motorists and emergency personnel in their vehicles, cut off power to thousands of homes, and raised the death toll from storms that had been chilling much of the United States for days.
As of Saturday afternoon, nearly 2,700 flights in the United States had been canceled as a result of the weather that slowed down airport operations across the nation.
Friday’s bitter cold and strong winds cut off power and reduced energy production across the United States, driving up the cost of heating and electricity.
More Russia is ready to resume gas sales to Europe
Kazuhiko Saito, chief analyst at Fujitomi Securities Co., stated, “Fears over supply disruption from winter storms in the U.S. prompted buying, though trade was thin as many market participants were away on holiday.” “But the U.S. weather is forecast to improve this week, which means the rally may not last too long.”
Worries over a potential creation slice by Russia likewise added to gains.
According to Deputy Prime Minister Alexander Novak, who was quoted by the RIA news agency on Friday, Russia may reduce its oil output by 5 to 7 percent in the early years of 2023 in response to price caps.
