Oil on the move
Shanghai reports a 51% drop in coronavirus infections among its population. So far, cases are no longer coming from transmission among the population. This behavior may suggest that the oil trend is upward.
As a result, of the decrease in infections, it is possible that one of the most important cities in the global economy will put an end to the harsh confinement regime in which its population lives.
By opening up, Shanghai and Beijing will allow the world’s supply chains to restart; as well as the activities of millions of people who have been living in virtual isolation.
Oil prices are recovering strongly after two days of sharp losses amid a tighter supply outlook.
PVM Oil Associates.
On the other hand, this opening may balance market movement in the face of the current inconsistency in Russian petroleum imports that are globally sanctioned, due to the war against Ukraine.
Likewise, the war generated an increase in inflation; and as a consequence, fuel prices went up, projecting the blow to the cost of basic food basket products.
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Price of blends on the rise
After a long period of decline, the price of a barrel of oil managed to surpass $103 usd. Moreover, the market is positive about the reduction of coronavirus cases in the Asian country. It will begin to reduce the extreme and inhumane confinement measures that generated inflation in the past months.
The oil market has been far from consistent lately, which has driven many away from trading the commodity. Trading crude oil right now is like trying to understand the mood swings of a teenager. It can seem like a futile effort.
Rebecca Babin, senior energy trader at CIBC Private Wealth Management.
At the moment, oil is up 30% for the year so far; mainly on the back of the economic recovery brought on by the waning pandemic.
