NEW DELHI: Global crude oil prices rose marginally on Monday in major Chinese cities following the lifting of the Covid-induced lockdown.
At 1138, the November Brent contract on the Intercontinental Exchange was trading at $91.71 a barrel, up 0.39% from its previous close. West Texas Intermediate (WTI) October contract rose 0.15% to $85.24 a barrel.
China is one of the largest importers of crude oil globally, and mobility restrictions in the country had raised demand concerns. The Chinese city of Chengdu, which was the biggest city to face a Covid lockdown after Shanghai earlier this year, is set to ease restrictions for a two-week lockdown starting Monday.
Oil prices fell largely on concerns about sanctions in China and rate hikes by central banks, including the US Federal Reserve.
Sriram Iyer, Senior Research Analyst, Reliance Securities, said the leak at the Basra oil terminal in Iraq also supported the prices.
“However, the upside was overshadowed by fears that heavy interest rate hikes would curtail global economic growth and fuel demand. In addition, rising prospects of a global slowdown as well as higher US interest rate expectations weighed on prices last week.”
Analysts said investors would look to the Federal Open Market Committee meeting of the US Federal Reserve. The FOMC will announce its policy decision on September 21.
“The meeting of the US Federal Reserve, where the central bank is widely expected to hike rates by 75 basis points, signals more tightening to come. Iyer said the move is expected even after the US inflation data in August read higher than expected, indicating that inflationary pressures are yet to ease in the country.
The rate hike by the US Fed is likely to be followed by other major central banks, including the European Central Bank, which could affect consumption, and thus the demand for crude.
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