Oil prices extended gains, propped up by a weaker dollar and tight supplies that offset concerns about recession; and the prospect of widespread COVID-19 lockdowns in China again reducing fuel demand.
Brent crude futures for September settlement rose $2.54, or 2.5%, to $103.70 a barrel by 0648 GMT, after a 2.1% gain. U.S. West Texas Intermediate (WTI) crude futures for August delivery gained $2.31; or 2.4%, to $99.90 a barrel, after climbing 1.9% in the previous session.
Last week, Brent and WTI posted their biggest weekly drops in about a month on fears of a recession that will hit oil demand. Mass COVID testing exercises continued in parts of China this week; raising oil demand concerns at the world’s second-largest oil consumer. However, oil supplies remained tight, supporting prices. As expected, U.S. President Joe Biden’s trip to Saudi Arabia yielded no pledge from the top OPEC producer to boost oil supply.
Biden wants Gulf oil producers to step up output to help tame oil prices and drive down inflation. On Sunday, Amos Hochstein, a senior U.S. State Department adviser for energy security, said on CBS’ Face the Nation that the trip would result in oil producers taking “a few more steps”; in terms of supply though he did not say which country or countries would boost output.