Brent crude rose 26 cents to settle at $122.27 a barrel. U.S. West Texas Intermediate crude rose 26 cents to settle at $120.93 a barrel. The trade was volatile, with prices falling around $3 a barrel earlier.
Oil prices rose in a volatile trading session on Monday as tight global supply outweighed concerns that demand would be pressured by a spike in COVID-19 cases in Beijing and further rises. interest rates.
Brent crude rose 26 cents to settle at $122.27 a barrel. U.S. West Texas Intermediate crude rose 26 cents to settle at $120.93 a barrel. The trade was volatile, with prices down around $3 a barrel earlier.
Oil supplies are tight, with OPEC and its allies unable to fully meet promised production increases due to a lack of capacity at many producers, sanctions against Russia and unrest in Libya that has reduced the production.
Oil surged in 2022 as Russia’s invasion of Ukraine in February compounded supply issues and demand recovered from lockdowns related to the COVID-19 pandemic. In March, Brent hit $139, the highest since 2008. Last week, both oil benchmarks rose more than 1%.
“We were struggling with the Russian loss (of oil), so now add an exclamation point with the Libyan situation,” said Robert Yawger, executive director of energy futures at Mizuho.
On Saturday, the average price of gasoline in the United States topped $5 a gallon for the first time, according to AAA data.
Raising concerns about demand, Beijing’s most populous district, Chaoyang, announced three rounds of mass testing to quell a “fierce” outbreak of COVID-19.
“We don’t know what’s going to happen with China. The mood is austere right now,” Price Futures analyst Phil Flynn said.
Worries over further rate hikes, bolstered by Friday’s US inflation data showing the consumer price index rose 8.6% last month, also pushed oil lower. [MKTS/GLOB]
Other financial markets also fell as investors feared the Federal Reserve might tighten policy too aggressively and cause a sharp economic slowdown. The S&P 500 was on track to confirm a bear market. The Fed’s next policy decision will be on Wednesday.
In Europe, Francesco Giavazzi, Italian Prime Minister Mario Draghi’s closest economic adviser, said on Monday that interest rate hikes by the European Central Bank were not the right way to curb soaring prices.
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