Key notes
On Monday, oil prices increased as hopes that China would loosen its COVID-19 limits won out against worries that a global recession would reduce the demand for energy.
After Beijing lifted mobility restrictions, China, the world’s biggest importer of crude oil, is already witnessing the first of three anticipated waves of COVID-19 instances. Beijing has stated that it will increase economic support in 2023.
Demand is unquestionably being negatively impacted, according to Naeem Aslam, analyst at brokerage Avatrade. But not all is so bad, as China has pledged to confront all economic defeatism and therefore will adopt whatever measures are required to encourage growth in the economy.
By 12:56 p.m. EST (1756 GMT), Brent crude had increased by 96 cents to $80.00 per barrel, while U.S. West Texas Intermediate crude had increased by $1.23 reaching $75.52.
Early in the year, following Russia’s invasion of Ukraine in February, oil prices soared toward an all-time record of $147 a barrel. Since then, the majority of this year’s gains have been undone as supply concerns have given way to recessionary fears.
After weeks of negotiations on the extra precaution that has divided opinion inside the group as it attempts to contain the energy crisis, the energy ministers of the European Union finally agreed on a gas price ceiling on Monday.
According to the document outlining the final agreement, the cap may be activated beginning on February 15, 2023.
The U.S. Energy Department’s announcement on Friday that it will start buying back petroleum for the Strategic Petroleum Reserve—the first acquisitions since for a record 180 million barrels from the reserve were discharged this year—supported the price of oil.
