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Oil prices near their highest level in 3 months, despite decline

Oil prices

Doha, (Business News Report)|| Oil prices are still near their highest levels in three months, despite their decline at the end of trading on Thursday.

The decline came after parts of Shanghai imposed new closures to contain the Coronavirus pandemic.

Oil prices are still rising, with strong gains in refined product prices.

Brent crude futures for August fell 51 cents, or 0.4%, to settle at $123.07 a barrel.

US West Texas Intermediate crude for the month of July lost 60 cents, or 0.5%, to $121.51 a barrel.

Oil prices have risen steadily over the past two months, driven by significant increases in the prices of refined products due to tight supply as well as increased demand.

Across the world, some refineries have closed facilities and production capacity is limited due to reduced activity in Russia, the world’s largest exporter of crude oil and fuel, following its invasion of Ukraine.

Meanwhile, peak summer gasoline demand in the US continues to boost crude oil prices.

The United States and other countries have engaged in a series of drawdowns from strategic reserves, but so far they have had limited impact as global crude production has risen very slowly.

Government data showed on Wednesday, June 9, 2022, that US gasoline stocks fell unexpectedly last week, indicating that demand for car fuel has held up during the peak driving period despite the sharp rise in gasoline prices.

Giving a boost to crude prices, China’s exports jumped last May by 16.9% from the previous year, as the easing of COVID-19 restrictions allowed some factories to resume operations. This is the fastest growth since January of this year and more than double analyst expectations.

However, parts of Shanghai began imposing new closure restrictions on Thursday, as residents of Minhang District received orders to stay in their homes for two days to control the risks of transmission.

“There is an exaggeration in the demand for crude oil futures,” Bloomberg news agency quoted Dennis Kessler, senior vice president of trading at BOK Financial, as saying. The new Coronavirus in China is in this direction today.”

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