By Adedapo Adesanya
Oil prices rose on Monday as tight global supplies outweighed worries that demand would be pressured by a flare-up in COVID-19 cases in Beijing and more interest rate hikes.
Brent crude rose 26 cents or 0.23 per cent to settle at $122.27 a barrel and the United States West Texas Intermediate crude rose 25 cents or 0.22 per cent to settle at $120.93 a barrel.
The market was bullish yesterday as oil supplies are tight, with the Organisation of the Petroleum Exporting Countries (OPEC) and allies unable to fully deliver on the pledged output increases because of a lack of capacity in many producers.
This is happening as the US and the European Union (EU) have announced sanctions on Russian energy following its February invasion of Ukraine.
Unrest in Libya has also slashed output, supporting prices.
In the latest from the African state, a blockade of Libyan oil output by groups aligned with forces in the east of the country expanded last week with the closure of two more export terminals, a threat to close another, and reduced production at a major field.
Last Thursday exports were halted at the ports of Ras Lanuf and Es Sider and a day after, a group urged the closure of Hariga port. Engineers at Sarir field said production had been reduced.
Previous periods of political tension in Libya have frequently involved shutdowns of oil output or exports by various forces.
On the demand end, the parts of China imposed a new lockdown restriction and announced a round of mass testing for millions of residents.
China’s zero-COVID policy with immediate partial lockdowns to halt the spread of the virus and mass testing for millions of residents will spook the market.
Concern about further rate hikes in the world’s largest oil producer heightened by Friday’s US inflation data showing the consumer price index rose 8.6 per cent last month, also pressured oil lower.
In Europe, a familiar source eased any worries of an interest rate hike on Monday, saying that European Central Bank interest rate hikes were not the right way to curb surging price rises.
