After four days of decline, oil rebounded on Thursday. This was aided by the hope that China’s anti-COVID measures will ease and signs that some tankers carrying Russian crude oil were delayed by a G7 price cap.
On Wednesday China announced the most radical changes to their resolute anti-COVID regime since the pandemic. At least 20 oil tankers were delayed crossing the Mediterranean from Russia’s Black Sea ports.
Brent crude oil rose to 69 cents or 0.9
By 1445 GMT, % had been achieved at $77.86 per barrel. U.S. West Texas Intermediate crude oil (WTI), however, gained $1.42 or 2% to $73.43.
Analyst at Avatrade, Naem Aslam said, “Today we do see some green pricing action.” Due to the recent intense sell-off, prices are now oversold. However, price action doesn’t indicate a strong bullish bias.
According to Eikon data, Brent’s 14-day relative strength index was lower than 30 on Thursday. Technical analysts consider this a sign that an asset is in excess and may be in a position for a rebound.
Brent and U.S. crude oil hit 2022 lows Wednesday. This was due to the loss of all gains after Russia’s invasion of Ukraine. It caused the worst global energy crisis in decades and brought oil to $147.
Officials from the West were meeting with their Turkish counterparts to solve the tanker queues. This was after the G7, European Union and British Treasury imposed new restrictions on Russian oil exports on Dec. 5.
According to Tamas Varga, an oil broker PVM, the queues indicate that the punitive measures have already affected the Black Sea’s supply.
“In a healthy economy, such a development is the equivalent to firing the start gun in the race for $100 back.”
There were concerns about a slowdown in economic growth, a weakening fuel demand, and the possibility of further interest rate increases in the United States. The Federal Reserve is widely anticipated to increase interest rates by 50 basis points next week.
U.S. crude inventories declined last week, but gasoline and distillate inventories soared, raising concerns about easing demand.
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