A big rise in oil prices .. What is the reason?

Oil prices rose on Tuesday, recouping losses incurred earlier in the session, as the impact of plunging global supplies and an expected increase in fuel demand during the summer travel season in the United States outweighed concerns about a possible recession and anti-Covid-19 restrictions in China.

In a move analysts say will contribute to a further decline in supplies in the market, the European Union is close to agreeing to ban Russian oil imports. This ban is likely to be agreed upon “within days”, according to the German Economy Minister’s statement on Monday.

Brent crude rose 18 cents, or 0.2%, to $113.60 a barrel. West Texas Intermediate crude rose 11 cents, or 0.1%, to $110.40 a barrel, by 1222 GMT.

Oil has risen significantly this year, with Brent crude reaching $139 a barrel in March, its highest since 2008, after supply concerns increased in the wake of Russia’s invasion of Ukraine.

Beijing is stepping up quarantine efforts to end the month-long coronavirus outbreak, while Shanghai is set to lift anti-epidemic restrictions after just over a week.

Investment banks, including UBS and Goldman Sachs, have lowered their growth forecasts for China for 2022. Meanwhile, the head of the International Monetary Fund said she does not expect a recession in major economies, but she cannot rule out one.

Another source of support for oil prices is the demand for gasoline during the summer driving season in the United States, when it usually peaks.

Analysts expect a decline in US gasoline and oil stocks in the latest weekly reports, the first of which is from the American Petroleum Institute at 2030 GMT.