Brent crude on Monday climbed for a fifth straight day as supply concerns led to a rise in prices due to the easing of pandemic conditions in parts of the world.
In the early hours of the London trading session, Brent crude was up 1.5% at $79.23 a barrel, having gained for a third consecutive week. The price of U.S oil rose 1.5% last week to $75.09 a barrel, its highest level since July.
All regions are experiencing tight supply. In addition to rising gas prices, rising power prices are also contributing to the rise in oil prices
OPEC members and their allies have had difficulty boosting output as a result of the demand rebound, as well as mismanagement or maintenance delays caused by the pandemic.
Oil prices barely dropped as PetroChina and Hengli Petrochemical purchased four cargoes totalling about 4.43 million barrels in China’s first public oil sale.
As refiners in this second-largest importer of crude stocked up to anticipate increased demand, oil imports to India rose to a three-month high in August, rebounding from a one-year low reached in July.
Market participants should keep a close eye on China’s ongoing developments, which remain fluid. According to reports, offshore bondholders had not yet received interest payments by the end of the trading week.
A default on Evergrande is the main threat to Chinese growth, which impacts global production. Despite being the world’s second biggest economy, Chinese oil consumption is still substantial.
Following the FOMC’s rate decision, commodity prices were likely kept afloat. In that meeting, Powell hinted at the mid-year completion of policy tapering. Also, the central bank is relatively optimistic about the economy, ignoring near-term risks related to Delta Covid-19.