Oil prices rose on Monday as traders became more optimistic about the demand outlook amid news of the lifting of quarantine restrictions in China’s Chengdu, the capital of Sichuan province.
Chengdu, home to 21 million people, has become the largest city in China after Shanghai, where a strict lockdown was introduced to curb the spread of COVID-19. From Monday, major quarantine restrictions are lifted in Chengdu.
“The main reason for the fluctuation in oil prices is the change in demand expectations,” said Vishnu Varatan, an analyst at Mizuho Bank Ltd. in Singapore, quoted by Bloomberg. “Easing quarantine restrictions in China is an important factor for the market. We are talking about pent-up demand here.” , and that explains the immediate market reaction.”
The price of November futures for Brent oil on the London ICE Futures exchange by 8:10 am CST on Monday is $91.9 per barrel, which is $0.55 (0.6%) higher than the closing price of the previous session. As a result of trading on Friday, these contracts rose by $0.51 (0.6%) to $91.35 per barrel.
The price of futures for WTI oil for October in electronic trading on the New York Mercantile Exchange (NYMEX) rose by this time by $0.37 (0.43%), to $85.48 per barrel. By the close of the market on Friday, the value of these contracts increased by $0.01 to $85.11 per barrel.
As a result of the past week, Brent fell by 1.6%, WTI – by 1.9%.
The focus of traders this week – the meeting of the Federal Reserve System (FRS) and the Bank of England. Fears related to the fact that the rapid tightening of monetary policy by the world’s central banks will lead to a recession in the global economy and a drop in oil demand are one of the key factors pushing down the oil market in recent months. Oil prices are likely to end the third quarter with a decline, which will be noted for the first time in two years, Bloomberg notes.
