William Watts, MarketWatch
NEW YORK
EnergiesNet.com 04 27 2022
Oil futures rose Tuesday, with the U.S. benchmark closing back above the $100-a-barrel threshold as China took steps to backstop its economy and avoided a full lockdown of Beijing in response to rising COVID-19 cases.
Price action
- West Texas Intermediate crude for June delivery CL.1, +3.22% CL00, +3.22% CLM22, +3.22% gained $3.16, or 3.2%, to settle at $101.70 a barrel.
- June Brent crude BRNM22, +0.27% rose $2.67, or 2.6%, to finish at $104.99 a barrel on ICE Futures Europe. WTI fell 3.5% Monday, while Brent lost more than 4%.
- May natural-gas futures NGK22, +2.58% rose 3.1% to close at $3.3388 per million British thermal units.
- June gasoline RBM22, +3.41% rose 2.8% to $3.331 a gallon.
- June heating oil was up 9.6% at $3.8173 a gallon.
Market drivers
Beijing on Tuesday was enforcing COVID-19 lockdowns and expanding testing in an effort to contain a COVID outbreak in the capital, news reports said. A lockdown of Shanghai, the nation’s largest city and major financial and commercial hub, has already amplified worries over China’s economic growth prospects.
But analysts said the lack of a full lockdown of the capital and an announcement by the People’s Bank of China that it would work to provide monetary policy support to small businesses and industries most affected by the pandemic provided relief.
“Oil prices rebounded big time after the Chinese government failed to impose a lockdown on Beijing and promised more stimulus for people impacted by previous shutdowns,” said Phil Flynn, analyst at Price Futures Group, in a note.
“More stimulus from China could mean more oil demand and that is a sign of hope in a market that has been concerned about slowing demand not only in China but around the world,” he said.
Oil and other energy products have seen volatile trade in the wake of Russia’s Feb. 24 invasion of Ukraine, with the U.S. benchmark briefly trading above $130 a barrel in early March and Brent nearly touching $140. WTI closed at $92.10 on the eve of the invasion, while Brent was at $94.05.
Meanwhile, Russian energy giant Gazprom RU:GAZP told Poland’s PGNiG, the country’s main natural gas supplier, it will halt gas supplies along the Yamal pipeline from Wednesday morning, PGNiG said in a statement Tuesday, although the Polish government said it had sufficient reserves, Reuters reported.
marketwatch.com 04 26 2022
