Oil Prices Advance, but Uncertainty on Rising Covid-19 Cases in China Curbs Gains

Early Tuesday saw oil prices rise further on the back of a weaker dollar and reports that the U.S. will be refilling its Strategic Petroleum Reserve. However, gains were capped by concerns about the impact of increasing Covid-19 cases in China.

Brent crude futures advanced 76 cents, or 0.95%, to $80.56 a barrel at 9.41 A.M. (Thai time).

U.S. West Texas Intermediate (WTI) crude futures rose 84 cents, or 1.12%, to $76.03 barrel.

Following last year’s record release of 180 million barrels from the stockpile, the United States said last week that it will acquire up to 3 million barrels of oil for the Strategic Petroleum Reserve.

A weaker US dollar has also boosted prices, with the dollar index hovering at 104.7, as it makes oil more cheap for those holding other currencies than the US dollar.

Experts have suggested that rising prices can only be supported by clear increases in demand.

China reported an increase in new confirmed Covid-19 cases to 2,722 on Tuesday, up from 1,995 the day before. There are, however, rising doubts over whether the official tally is reflecting the real number of cases with anecdotal evidence suggesting the disease is ripping across cities.