Oil jumps as the soft dollar and tight supply supports

Oil prices extended gains on Monday, 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 $2.44, or 2.4%, to $103.60 a barrel by 0900 GMT, having advanced by 2.1% on Friday.

U.S. West Texas Intermediate (WTI) crude futures for August delivery gained $2.17, or 2.2%, to $99.76 after rising by 1.9% in the previous session.

This year’s oil prices have led to a rush among private investors to put properties across the US shale patch on the market, Dittmar said.

“The challenge is finding buyers willing to pay their asking prices,” Dittmar added.

The Permian Basin of west Texas and New Mexico accounted for 46 per cent of last quarter’s deal value, making it the most active oil and gas region in the United States.

The Rockies followed with 12 per cent, Midcontinent with 6 per cent, US Gulf Coast with 5 per cent and the West Coast with 2 per cent, according to Enverus data. The offshore Gulf of Mexico, eastern United States and Alaska did not register deals.

Brent crude futures for September delivery rose 80 cents, or 0.8 per cent, to $99.90 a barrel by 0007 GMT, while WTI crude rose 69 cents, or 0.7 per cent, to $96.47 a barrel.

The Fed’s most hawkish policymakers on Thursday said they favoured another 75-basis-point interest rate increase at the US central bank’s policy meeting this month, not the bigger rate raise that traders had raced to price in after a report Wednesday showed inflation was accelerating.

The Fed rate hike is expected to follow a similar move by the Bank of Canada, which surprised the market on Wednesday with a 100-basis-point increase.

The rate hike uncertainty, along with weak economic data, caused both benchmark contracts to drop at one stage on Thursday to below the Feb. 23 close, the day before Russia invaded Ukraine in what Moscow calls “a special military operation”. Still, both Brent and WTI had clawed back nearly all losses by the end of the trading session. 

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