Oil recovered partially after falling 4 percent on Monday as traders weighed China’s demand outlook after easing some virus restrictions in financial hub Shanghai.
On Monday, EU foreign ministers said the bloc was discussing a Russian oil embargo as part of its next package of sanctions.
West Texas Intermediate futures were up more than 2 percent to trade above $96 a barrel on Tuesday.
Shanghai has eased lockdowns on some apartment complexes, but most people have remained confined to their homes and authorities have said they will reintroduce restrictions as virus cases rise.
Oil has now given up almost all of its gains since the Russian invasion of Ukraine in late February.
“What we’re seeing now looks like a short-lived rally,” said Will Sungchil Yun, a senior commodities analyst at VI Investment Corp. in Seoul. “Investors are still concerned about the negative impact that the virus flare-up will have on the country’s growth and demand.”
The oil market has endured a turbulent trading spell since late February, lashed by Russia’s invasion of its neighbor, rising tensions in the Middle East, the virus flare-up in China and tighter US monetary policy. The war in Ukraine has entered its second month, despite efforts to reach a ceasefire.
The invasion has fueled inflation, prompting the US and its allies to release strategic reserves to tame soaring energy prices.
Meanwhile, OPEC’s top diplomat told European Union officials that the current crisis in global oil markets, caused by Russia’s war, is beyond the group’s control.
Brent remains in a bullish backwardation structure — in which short-term contracts are more expensive than later ones — but it has weakened sharply over the past week.
The prompt time spread for the global benchmark was 16 cents a barrel backwardation compared to $1.53 early last week.
https://www.independent.ie/business/world/oil-rebounds-as-investors-assess-chinas-easing-virus-lockdown-41544530.html Oil rebounds as investors assess China’s easing of virus lockdown