Oil prices rise 3% .. and Brent crude is near 104 dollars
Oil prices rose nearly 3% during Monday’s trading, supported by a weak dollar and tight supplies.
Prices continued to gain, offsetting concerns about a recession and the possibility of a widespread coronavirus shutdown in China; Which again led to reduced demand for fuel.
Oil Prices Today
The price of futures contracts for the benchmark Brent crude – for September delivery – increased by 3.04%, recording $103.93 a barrel.
The price of West Texas Intermediate crude futures – August delivery – also rose 2.49%, to $100.02 a barrel, according to data seen by the specialized energy platform.
Last week, oil prices recorded their largest weekly decline in about a month, amid fears of a recession that would harm oil demand, and the two benchmark crudes (Brent and West Texas Intermediate) fell by 5.5% and 6.9%, respectively.
Group training for coronavirus testing continued in parts of China this week; Which raised concerns about the demand for oil in the second largest oil consumer in the world.
However, oil supplies remained scarce; Supporting prices, as expected, US President Joe Biden’s trip to Saudi Arabia failed to achieve any pledge from the largest producer in the Organization of Petroleum Exporting Countries (OPEC) to increase supply.
Biden wants Gulf oil producers to increase production to help tame oil prices and lower inflation.
On Sunday, the US State Department’s senior adviser on energy security, Amos Hochstein, said the trip would result in oil producers taking “a few more steps” in terms of supply, though he did not say which country or countries would boost production.
Strategic Oil Reserves
“While there were no immediate commitments to increase oil production, reports indicated that the US indicated an expected gradual increase in supply,” Baden Moore, head of commodity research at the National Australian Bank, said in a note.
He added, “The decline in SPR releases from November may offset this increased supply, albeit not greater than about one million barrels per day.”
The Organization of Petroleum Exporting Countries (OPEC) and allies, including Russia, in the OPEC + alliance, are scheduled to hold a meeting on August 3 to monitor production and agree on cooperation mechanisms with the expiration of the current production agreement in September.
Nord Stream 1
Global markets focus this week on the resumption of Russian gas flows to Europe through the Nord Stream 1 pipeline, whose maintenance is scheduled to end on July 21.
Governments, markets and companies fear the possibility of extending the closure due to the war in Ukraine.
“Brent crude will find support at the end of the week if Russia does not return gas to Germany after the maintenance of Nord Stream 1,” said Jeffrey Halley, chief analyst at OANDA.
He pointed out that the loss of this gas would damage Germany, the fourth largest economy in the world, and increase the risk of a recession.
Russian Oil Prices
In a separate context, US Treasury Secretary Janet Yellen said that she had held fruitful meetings on setting a proposed ceiling for Russian oil prices with a group of countries on the sidelines of a meeting of G-20 finance ministers.
China’s Ministry of Commerce said last week that Yellen raised the idea of a price cap during a virtual meeting on July 5 with Chinese Vice Premier Liu He.
The ministry added that setting a ceiling for Russian oil prices is a “very complex issue” and a prerequisite for resolving the Ukraine crisis is the promotion of peace talks between the parties involved.