By Yasin Ebrahim
Investing.com – Oil prices moved back above $100 a barrel Tuesday as Shanghai’s move to ease some Covid-19 lockdown measures eased worries about the impact on global demand.
On the New York Mercantile Exchange crude futures gained 6.7% to settle at $100.60 a barrel, while on London's Intercontinental Exchange (NYSE:ICE), Brent added 6.3% cents to settle at $104.64 a barrel.
Oil prices bounced back from a slump a day earlier with “the driver du jour being more optimistic speculation toward China’s lockdowns,” Scotiabank said.
Shanghai introduced the three-tier system to curb the spread of Covid-19, allowing some residents to leave their homes. The impact of China’s restrictions hurt travel demand and had stoked fears about global oil demand.
The consulting firm FGE forecast the decline in transport demand in a range of 1.2 million to 1.3 million barrels per day, or bpd, in total.
Oil prices were also boosted by fresh fears about supply disruptions from Russia after President Vladimir Putin said talks with Ukraine "have again returned to a dead-end situation for us." Putin comments come in the wake of allegations that Russia had committed war crimes in Bucha.
The impact of sanctions, or voluntary self sanctions by companies on imports of Russia oil and gas are already starting to take shape.
Russian oil and gas condensate production slipped below 10 million bpd on Monday to its lowest since July 2020, Reuters reported, citing two unnamed sources familiar with data.
The rebound in oil prices comes a day ahead of fresh U.S. weekly inventory data expected to show a second-weekly build in stockpiles.
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies rose by about 863,000 barrels last week.