Brent Crude Prices Recoup Losses And Rise Nearly 3%, Back-Up Above $100
The wild gyrations in crude markets continued on Tuesday, with Brent oil prices trading nearly 3 per cent higher and back up above $100 after briefly languishing below that level in the previous session.
Crude futures have see-sawed in recent weeks, with the most volatility since June 2020.
Indeed, the benchmark Brent crude was up 2.7 per cent to about $101 per barrel after languishing below the $100 a barrel mark on Monday, following a fall for the second straight week. The US West Texas Intermediate futures traded nearly $3 higher at around $97 a barrel.
Both those contracts had settled around 4 per cent lower on Monday.
Today's moves were primarily led by the news that China has relaxed some COVID restrictions easing demand concerns, and as major oil-producing countries warned, the supply loss from Russia because of sanctions cannot be replaced.
"Market sentiment is in see-saw mode, both on the supply and the demand front," Vandana Hari, founder of oil market analysis provider Vanda Insights told Reuters.
She added that the partial easing of Shanghai lockdowns lifted some of the downward pressure stemming from concerns about Chinese oil demand.
Tuesday's rise comes from the European Union's oil embargo threat on Russia, supply concerns despite the record release of oil from emergency stock.
The latest to weigh on investors' sentiment is a warning from the Organization of the Petroleum Exporting Countries (OPEC) that it would be impossible to replace the volumes of Russian oil and other liquids exports lost due to sanctions or voluntary actions.
"The oil market is still vulnerable to a major shock if Russian energy is sanctioned, and that risk remains on the table," wrote Edward Moya, a senior market analyst with OANDA, as reported by Reuters.
"Oil prices will play tug-of-war here as crude inventories remain low, but energy traders will struggle to shake off these steady announcements of new COVID restrictions in China," he added.
Markets will also keep an eye on the US crude oil inventories data from the American Petroleum Institute due later on Tuesday.
