Oil prices rebound from sharp drop on China demand concerns

FILE PHOTO: Storage tanks are seen on the Petroineos Ineos petrol refinery in Lavera, France, March 29, 2022. REUTERS/Benoit Tessier

Oil costs opened barely larger on Tuesday, after falling sharply the prior session on worries that continued COVID-19 lockdowns in China would eat into demand and because the U.S. greenback rose to a two-year excessive.

Brent crude futures had been at $102.57, up 25 cents, or 0.2% and U.S. West Texas Intermediate contracts climbed to $98.70, up 16 cents, or 0.2% at 0002 GMT.

Each contracts had settled down round 4% on Monday, with Brent down as a lot as $7 a barrel within the session and WTI dipping roughly $6 a barrel.

In China lockdowns to counter COVID in Shanghai have dragged into their fourth week. In the meantime orders for mass testing, together with in Beijing’s largest buying district, have prompted fears of different Shanghai-style lockdowns.

“The hit from Chinese language lockdowns is over one million barrels a day and the testing of 12 districts over the subsequent 5 days will decide the subsequent main transfer for crude costs,” wrote Edward Moya, a senior market analyst for OANDA in a word.

The U.S. greenback additionally hit a two-year excessive on Monday, making oil dearer for different forex holders.

“Provide fears usually are not the first focus for vitality merchants, and now you will have a surging greenback that’s including additional stress throughout all commodities,” OANDA’s Moya mentioned.

Reporting by Liz Hampton in Denver; Modifying by Kenneth Maxwell

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