Oil prices rose in opening trade on Monday, as a weak dollar and supply concern ahead of the European Union‘s ban on Russian oil in December offset worries of a worldwide recession dampening fuel consumption.
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The brent crude futures increased $1.15, or 1.3%, to $92.50 per barrel after closing up 0.5% the previous day. West Texas Intermediate crude in the United States was trading at $86.16 per barrel, up $1.05, or 1.2%.
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Both futures, which fell more than 1% last week on fears that another Federal Reserve interest rate rise would hinder the global economy, were backed by a weaker dollar, which had fallen from multi-year highs. When the US dollar falls in value, dollar-denominated commodities become less costly for holders of other currencies.
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Worries about demand in the world’s second-largest energy consumer, China, were allayed by the relaxation of COVID-19 restrictions in Chengdu, a southern city of more than 21 million people. After Beijing announced new quotas, China’s diesel and gasoline exports also increased, reducing excessive local stocks.
Despite concerns about the global economy’s future, Kuwait Petroleum Corporation (KPC) CEO stated on Sunday that consumers continue to seek the same volumes.
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In compliance with its OPEC quota, the Gulf state presently outputs more than 2.8 million barrels of oil per day.
A representative for Shell in Nigeria said on Sunday that the 200,000 barrels per day Bonga deep water storage and unloading vessel is planned for maintenance in October.
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Last week, US energy businesses set up an oil and natural gas rigs for the first time in three weeks, indicating increased supply from the US.
The oil and gas rig count, an early sign of future output, increased four to 763 in the week ended September 16, the most since August, according to energy services provider Baker Hughes Co.