Oil Rises as OPEC Cuts Forecast, China Eases Lockdown
Oil recouped some day-prior losses early on Tuesday, rising off six week low by about four per cent amidst volatile trading as China eased its lockdown on Shanghai.
Also helping price jump, the Organisation of Petroleum Exporting Countries (OPEC) warned it is unable to replace the lost supply from Russia while it lowered its 2022 demand forecast.
West Texas Intermediate crude for May delivery was last seen up US$3.93 to US$98.22 per barrel, while June Brent crude, the global benchmark, was up US$4.36 to US$102.84.
The rise off six-week lows comes as China slightly eases Covid-19 lockdown restrictions on Shanghai, declaring more than 7,000 homes as low risk in the city of 25 million. READ: Oil Prices Rise over Large Drop in U.S. Inventories
As well, OPEC secretary-general Mohammad Barkindo warned the cartel would not be able to replace the supply lost from Russia, as most OPEC members are unable to increase output.
“One factor that lent buoyancy to prices again was the slight easing of the tough lockdown measures in Shanghai …
“At the same time, OPEC Secretary-General Barkindo warned at a meeting between EU representatives and OPEC that OPEC would not be able to offset an outage of up to 7 million barrels per day in the event of an embargo on Russian oil,” Commerzbank analyst Barbara Lambrecht said in a release.
In its influential Monthly Oil Market Report issued on Tuesday, OPEC lowered its 2022 oil-demand forecast by 0.5-million barrels to 3.7-million barrels above 2021 levels on expectations for lower global economic growth.
The war in Ukraine is seen to continue complicating the inflation picture globally, Halley noted. Austria’s chancellor visited Moscow on Monday but came away with “no optimistic impression, an analyst said.
Meanwhile, the Organization of the Petroleum Exporting Countries has also rejected accusations from Europe that it could pump more oil if needed. #Oil Rises as OPEC Cuts Forecast, China Eases Lockdown
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