Early on Tuesday, oil prices barely changed as concerns about supply outweighed concerns about the economy and China’s adherence to its zero-COVID policy. U.S. West Texas Intermediate (WTI) crude increased 7 cents, or 0.1%, to $91.86 per barrel while Brent crude increased 7 cents, or 0.1%, to $97.99 a barrel by 0155 GMT.
On Monday, both benchmarks reached their highest levels since August on news that China, the major importer of crude oil, was considering removing itself from the COVID-19 restrictions. However, Chinese health officials reaffirmed China’s dedication to its stringent zero-COVID policy over the weekend. Additionally, recent data revealed that imports and exports of the nation unexpectedly decreased in October.
According to ANZ Research analysts, the fundamentals for oil in the near term are still optimistic with supply worries taking center stage. The market must act before European imports of Russian oil are prohibited by sanctions, according to ANZ. In punishment for Russia’s invasion of Ukraine, the European Union has banned the import of Russian oil, which is planned to begin on December 5 and end in February.
Market participants will be eyeing the U.S. CPI data this week for trading cues “where sticky inflation may strengthen the Fed’s hawkish stance and intensify recession fears”, weighing on oil, CMC Markets analyst Tina Teng said.