Oil prices are up in early trade on Monday with U.S. fuel demand, tight supply and a slightly weaker U.S. dollar supporting the market, as Shanghai ready to reopen after a two-month lockdown fuelled worries about a sharp slowdown in growth. Brent crude futures raised 82 cents to $113.37 a barrel, while U.S. West Texas Intermediate (WTI) crude futures raised 69 cents to $110.97 a barrel, adding to last week’s small gains for both contracts.
“Oil prices are supported as gasoline markets remain tight amid solid demand heading into the peak U.S. driving season,” said SPI Asset Management managing partner Stephen Innes. “Refineries are typically in ramp-up mode to feed U.S. drivers’ unquenching thirst at the pump.”
Although, market gains were capped by fears over China’s effort to crush COVID with lockdowns. The world’s largest oil importer is releasing its lockdowns in Shanghai and cut its five-year loan prime rate last week, signaling that the authorities are supporting a recovery.
A weaker U.S. dollar also driven oil higher on Monday, as that makes crude cheaper for buyers holding other currencies. The European Union’s incapacity to reach a final agreement on stopping Russian oil for its invasion of Ukraine, which Moscow calls a “special operation”, has also stopped oil prices from increasing much higher.