Oil prices extended their gains, mainly on a weaker dollar and tight supplies offsetting recession worries and the prospect of extended restrictions in China due to the coronavirus, again dampening demand for the fuel.
Brent futures rose $2.54, or 2.5%, to $103.7 a barrel.
West Texas Intermediate for August delivery rose $2.31, or 2.4%, to $99.9 a barrel.
The US dollar retreated from multi-year highs on Monday, supporting commodity prices from gold to oil.
A weaker dollar makes dollar goods more affordable for holders of other currencies.
Brent and WTI last week posted their biggest weekly declines of the month, amid concerns that a recession will hit oil demand.
Mass testing for the coronavirus continues in parts of China this week, raising concerns about oil demand in the world’s second-largest consumer.
However, oil supplies remained tight, supporting prices. As expected, Biden’s trip to Saudi Arabia failed to bring any commitment from OPEC’s top producer to boost oil supply.
Biden wants Gulf producers to ramp up production to help lower oil prices and lower inflation.
“Although there are no immediate commitments to increase oil production, the US has reportedly indicated an expected gradual increase in supply,” said an analyst at the National Australian Bank.
The next OPEC+ meeting on August 3 will be closely watched as the current production pact expires in September.
Global markets are focused this week on the resumption of natural gas flows to Europe via the Nord Stream 1 pipeline, which is scheduled to end maintenance on July 21.
Governments, markets and companies are concerned that the shutdown may be extended due to the war in Ukraine.
Source: Capital
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