Oil prices rise on weak dollar and supply concern
Oil prices rose on Monday on the weaker dollar. Ahead of the European Union's December embargo on Russian oil, supply concerns offset fears of global recession that could dampen fuel demand.
Brent crude futures rose 60 cents, or 0.7%, to $91.95 a barrel by 0330 GMT after rising 0.5% on Friday. West Texas Intermediate (WTI) crude was up 39 cents, or 0.5%, at $85.50 a barrel. The front month contract expires on Tuesday.
Both contracts, which tumbled more than 1% last week, were supported by the weaker dollar on concerns that another rate hike by the Federal Reserve could slow global growth. A weaker US dollar makes dollar-denominated commodities cheaper for holders of other currencies.
The market is focused on the start of European sanctions on Russian oil. The market is unlikely to receive a quick response from US mills, as supply will be interrupted in early December.
Analysts said further supply disruptions remain a risk, and easing of COVID-19 restrictions in China could also provide some optimism.
China has begun easing COVID sanctions in Chengdu, a southwestern city of more than 21 million people, which has helped to allay concerns about demand in the world's #2 energy consumer. China's gasoline and diesel exports also rebounded after Beijing issued new quotas, relieving high domestic inventories.
The CEO of Kuwait Petroleum Company (KPC) said on Sunday that despite questions about the future of the world economy, its customers still demand the same volumes with no change.
The Gulf state currently produces more than 2.8 million barrels per day, in line with the OPEC quota.
The Basra Oil Company said its oil loading and export operations from Iraq's Basra oil terminal returned to their normal rates on Saturday, a day after it was halted due to a spill that is now under control.
In Nigeria, Shell's 200,000 bpd Bonga deep-water storage and discharge vessel is scheduled to be serviced in October, a spokesperson said on Sunday.
Signaling more supply from the US, US energy firms added oil and gas rigs for the first time in three weeks last week.
Baker Hughes said Friday that the number of oil and gas rigs, an early indicator of future production, rose four to 763 by September 16, the highest since August.
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