Oil prices rose on Friday after China’s health authorities relaxed some of the country’s strict COVID restrictions.
Brent crude futures rose $2.47, or 2.6%, to $96.13 per barrel, extending the previous session’s 1.1% gain.
WTI crude futures in the United States rose $2.54, or 2.9%, to $89.01 per barrel, after rising 0.8% the previous session.
Lockdowns are more detrimental to mobility and oil prices than economic activity. Hence, the decision to liberalize the COVID-zero policy will benefit oil markets.
Prices rose on Friday as weaker-than-expected U.S. inflation data boosted hopes that the Federal Reserve will slow rate hikes, implying a soft landing for the world’s largest economy. A weaker U.S. dollar supports oil prices because it makes the commodity more affordable to buyers holding other currencies.
However, benchmark oil futures fell more than 2% on week-to-week concerns about limited Chinese demand for fuel, despite a rise in US crude inventories and daily gains due to the coronavirus.
Due to higher prices and increased investor interest in the region, initial public offerings in the Middle East have thrived this year.
As a result, IPO proceeds from the Middle East have accounted for nearly half of total IPO proceeds in the Middle East, Africa, and Europe region this year.
Still, in the Middle East, stock markets have been surging alongside oil prices since 2021, attracting increasing investor interest.
Natural gas prices at the U.S. benchmark will average $6.019 per million British thermal units this winter (November 2022-March 2023). According to the forecast, 4% lower natural gas storage levels heading into the winter withdrawal season and increased demand for liquefied natural gas. Meantime, the Freeport LNG facility reopens.
The African Union’s 55 member states have agreed on a common position to promote the expansion of energy infrastructure. The African Energy Commission mhas argued that gas and nuclear power should play a role in development alongside renewables. Environmentalists have warned wealthy countries not to negotiate new gas supplies with African counterparts at the climate summit. Powershift Africa, Greenpeace, and Climate Action Network representatives warned that the summit risks becoming a greenwashing festival.
Germany Is Taking an Unusually Direct Approach
Germany is assisting businesses and individuals dealing with the short-term price increases for gas and heating that are currently affecting many countries worldwide.
A law to that effect has been passed by the Bundestag, the main chamber of parliament. It should receive a confirmation soon from the Bundesrat, the second chamber. The law applies to private households and small businesses with an annual gas consumption of up to 1.5 million kilowatt-hours.
These individuals and families are also eligible for one-time government payments to assist with heating costs. The program is part of the government’s ongoing efforts to stabilize the prices of natural gas, heating oil, and electricity.
Chinese EconomyCommodity PricesCOVID-19 PandemicForecastGlobal EconomyInflationOil Prices