Oil prices climb 1% as dollar heads south

2022-05-13 08:12:48 GMT (Economies.com)
Oil prices climb 1% as dollar heads south

Oil futures rose nearly 1% in Asian trade with US crude rebounding from April 26 lows, while Brent climbed off April 25 lows as well, as the dollar index declined away from 2002 highs.


Markets are assessing the Chinese Covid 19 crisis, which impacted demand, and the latest developments in the Ukrainian crisis, with the EU now backing off from threats on banning Russian oil supplies.


US crude June futures rose 0.86% to $107.56 a barrel, while Brent futures due in July rallied 1.08% to $109.17 a barrel, as the dollar index slipped 0.14% to 104.62.


From the US, import prices are expected up 0.6%, slowing down from 2.6% in March, while the UoM consumer sentiment index is expected down to 64.1 from 65.2.


Several Fed officials are expected to speak today and possibly hint at the future of monetary policy in the US.


Fed Chair Jerome Powell said in earlier remarks the economy could handle two more 0.50% rate hikes in a row, to arrest the runaway inflation.


He expressed how difficult it's going to be to control the surging prices while ensuring continued support for the labor market.


Official US data showed crude inventories rose 8.5 million barrels last eek, while analysts expected a 1 million barrels deficit, with total stocks now rising to 424.2 million barrels.


Gasoline stocks fell 3.6 million barrels, down 5% from 5-year averages, while distillate stocks fell 0.9 million barrels.


Chinese authorities is clamping down heavily on any opposition to its zero-covid harsh policies against the pandemic, in order to contain the crisis quickly and return to solid growth.


China's central bank has issued statements asserting full support of the economy to provide enough liquidity and underpin small businesses.


Latest World Health Organization data showed global Covid 19 infections up to 516.92 million cases, with the death toll hitting 6.259 million.


Baker Hughes data showed US oil rigs rose by 5 rigs to 557 rigs, the highest since March 2020, while US output steadied at 11.9 million barrels.


US output is down 1.2 million bpd or 10% from a record high at 13.1 million bpd scaled in March 2020, while hitting a record low in August 2020 at 9.7 million bpd.

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