Oil prices rise due to weak dollar and supply problems

SINGAPORE (Reuters) – Oil prices rose in early Asian trading on Monday as dollar weakness and supply fears ahead of the European Union’s embargo on Russian oil in December offset fears of a global recession that could dampen fuel demand.

Brent crude futures rose $1.15, or 1.3%, to hit $92.50 a barrel at 0049 GMT after stabilizing 0.5% on Friday. U.S. West Texas Intermediate crude was at $86.16 a barrel, up $1.05, or 1.2%. The first month’s contract expires on Tuesday.

Both contracts, which fell more than 1% last week on fears that another interest rate hike by the Federal Reserve could slow global growth, were supported by a weaker dollar which reached multi-year highs. A weaker US dollar makes commodities denominated in dollars cheaper for holders of other currencies.

In China, an easing of COVID-19 restrictions in Chengdu, a southwestern city of more than 21 million people, has eased concerns about demand for the world’s second-largest energy consumer. Chinese gasoline and diesel exports also rebounded, easing high local stocks, after Beijing issued new quotas.

Despite questions about the future of the global economy, the managing director of Kuwait Petroleum Corporation (KPC) said on Sunday that its customers still demanded the same volumes without change.

The Gulf state is currently producing more than 2.8 million barrels of oil per day in line with its OPEC quota.

Elsewhere, oil loading and export operations from Iraq’s Basra oil terminal returned to normal on Saturday, Basrah Oil Company said, a day after being halted due to a spill that has now been contained. .

In Nigeria, Shell’s 200,000 barrel-per-day capacity deepwater storage and offloading vessel Bonga is due for maintenance in October, a spokesman said on Sunday.

Signaling more supplies from the United States, US energy companies added oil and gas rigs for the first time in three weeks last week.

The number of oil and gas rigs, an early indicator of future production, rose by four to 763 in the week to September 16, its highest since August, energy services company Baker Hughes Co said on Friday. .