[ad_1]
LONDON (Reuters) – Oil prices rose on Tuesday, supported by a weaker dollar and plans by the United States to replenish oil reserves, but gains were capped by uncertainty over the impact of rising COVID-19 cases in top oil importer China.
Brent crude futures were up 50 cents, or 0.65%, at $80.30 a barrel by 1035 GMT, up 76 cents from the previous session.
U.S. West Texas Intermediate (WTI) crude futures rose $1, or 1.31%, to $76.19 after rising 90 cents on Monday.
Oil prices were boosted last week after the United States announced plans to buy as much as 3 million barrels of oil for the Strategic Petroleum Reserve, following a record 180 million barrels released this year.
A weaker dollar also supported prices, making oil cheaper for holders of other currencies.
“Oil prices are likely to rise further as we expect further tightening in the physical market amid supply constraints and stronger global demand,” Qatari bank QNB said in a note, predicting oil prices to trade between 90 and 100 per barrel in the coming quarters. Between $115.
OANDA analyst Edward Moya said in a note that clear signs of demand growth would be needed for prices to climb further.
“The outlook for oil demand will be key in determining how high crude prices can go,” he said, adding that clarity could be elusive given mixed signals about China’s economic reopening.
While China has been easing pandemic restrictions, a surge in COVID-19 cases is not good for the oil market amid uncertainty over the country’s economic recovery, said CMC Markets analyst Tina Teng.
Cities across the country have been racing to add hospital beds and set up fever-screening clinics amid growing international concern that Beijing’s decision to roll back its strict “zero COVID” regime could lead to deaths and virus mutations.
“Crude’s rally, while modest, feels temporary. I expect downward pressure from global economic concerns to be widespread,” said Vandana Hari, founder of Vanda Insights in Singapore.
U.S. crude oil inventories are expected to have fallen by about 200,000 barrels last week, while gasoline and distillate stockpiles are expected to rise, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of reports from the American Petroleum Institute on Tuesday and the Energy Information Administration on Wednesday.
(Reporting by Dmitry Zhdannikov in London Additional reporting by Sonali Paul in Melbourne and Isabel Kua in Singapore Editing by David Goodman)
[ad_2]
Source link