Oil prices getting mixed cues

11 Jul 2022 , 02:11 PM

As traders weighed supply concerns against concerns about a recession or China’s COVID-19 limitations impacting demand, Brent traded higher on supply concerns while West Texas Intermediate (WTI) declined on Monday.

In addition to a rise of 2.3% on Friday, Brent oil futures were up 11 cents, or 0.1%, at $107.13 a barrel. However, U.S. WTI crude futures lost 15 cents, or 0.1%, to $104.64 per barrel, erasing a 2% gain from Friday. A public holiday in areas of Southeast Asia slowed trading.

The market was driven by concerns that raising interest rates to combat inflation would cause a recession and reduce oil demand last week, which led to weekly falls for both contracts.

On Monday, both benchmark contracts initially traded lower before turning positive and moving in distinct directions. A new Omicron subtype was found in Shanghai, according to the most recent data on COVID-19 instances in China, and there are still fears about the possibility of widespread lockdowns.

On the supply side, the market is still concerned about Western countries’ efforts to cap Russian oil prices. President Vladimir Putin has warned that additional sanctions might have “catastrophic” effects on the world energy market.

Concerns linger over how long crude from Kazakhstan will continue to flow through the Caspian Pipeline Consortium (CPC). Even though a Russian court ordered the pipeline to cease operations last week, supply has so far remained on the pipeline, which transports around 1% of the world’s oil.

According to a loading schedule, CPC Blend crude oil shipments are expected to increase to 5.45 million tonnes in August from 4.86 million tonnes in July.