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Oil prices rise as China’s export data improves, but new restrictions limit gains.

After China reported stronger-than-expected exports in May, oil prices held steady near 13-week highs on Thursday, though new Shanghai lockup limits limited gains.

At 0404 GMT, Brent crude futures were up 35 cents, or 0.3 percent, to $123.93 a barrel, while U.S. West Texas Intermediate crude was up 24 cents, or 0.2 percent, to $122.35 a barrel.

Both benchmarks closed at their highest levels since March 8, matching 2008 levels.

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China’s exports increased 16.9% year on year as COVID restrictions were eased, allowing some factories to reopen. This was the fastest growth since January this year, and exceeded analysts’ expectations of an 8.0 percent increase. In April, exports increased by 3.9 percent.

On Thursday, however, residents of Shanghai’s enormous Minhang area were told to stay at home for two days in order to control COVID-19 transmission concerns.

In a note released Thursday, Stephen Innes, managing partner at SPI Asset Management, stated, “The export performance is excellent throughout the light of the country’s multi-city lockdowns in the month.”

“However, the apparent negative feedback loop means there is less incentive for policymakers to shift away from ‘zero COVID’ anytime soon,” Innes said, noting that this was a “saw-off” for oil markets.

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Meanwhile, in the United States, high summer gasoline demand continued to offer a price floor.

The US saw a record drop in strategic crude reserves last week, despite rising commercial stocks, according to statistics released by the Energy Information Administration (EIA) on Wednesday.

Gasoline supplies in the United States surprisingly fell, indicating that demand for the motor fuel remained strong during peak summer despite sky-high pump prices.

“It’s difficult to envisage much downside in the coming months, with the gasoline market expected to tighten even further as we get closer to driving season,” said Warren Patterson, ING’s head of commodities research.

According to EIA statistics, apparent demand for all oil products in the US increased to 19.5 million barrels per day (bpd), with gasoline consumption up to 8.98 million bpd, according to ANZ analysts.

OPEC+ oil producers’ efforts to increase output are “not promising,” according to UAE energy minister Suhail al-Mazrouei, who noted that the organisation is presently 2.6 million bpd short of its aim.

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