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Oil Up as China’s Rising COVID Cases Renew Demand Concerns

Published 07/18/2022, 12:11 AM
Updated 07/18/2022, 12:23 AM
© Reuters

By Zhang Mengying – Oil was up on Monday morning in Asia. Investors are concerned China’s rising COVID cases could lead to resumption of rubs and further dent fuel demand.

Brent oil futures rose 0.64% to $101.81 by 12:23 AM ET (0423 AM GMT) and crude oil WTI futures jumped 0.39% to $94.94.

China, the world’s second-largest oil consumer, reported 691 news COVID cases on Saturday, up from 547 the previous day.

“Oil is opening the week softer as the market digests the demand impact of the rise in new COVID cases in China and as the market cautiously awaits the monumental event risk if Nord Stream 1 gas flow from Russia to Europe will resume later this week,” SPI Asset Management managing partner Stephen Innes told Reuters.

The Nord Stream 1 pipeline, the biggest pipeline carrying Russian natural gas to Germany, began its annual maintenance on July 11 due to the last 10 days.

Markets are concerned that the shutdown may be extended because of the war in Ukraine. Loss of gas would hit Germany, the world’s fourth-largest economy.

As expected, U.S. President Joe Biden failed to yield any pledge from the top Organization of the Petroleum Exporting Countries producers to add oil supply.

On Sunday, Amos Hochstein, a senior U.S. State Department adviser for energy security, said on CBS’ Face the Nation that the trip would result in oil producers taking “a few more steps” in supply although he did not specify which countries would boost output.


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