Jul 18, 2022 02:56AM ET
By: AnalysisWatch
Oil prices extended gains on Monday, supported by a weaker dollar and tight supplies that offset concerns about a recession and the prospect of widespread COVID-19 shutdowns in China, which in turn reduced fuel demand.
Brent crude futures for September were up $2.54, or 2.5%, at $103.70 a barrel by 0648 GMT, after rising 2.1% on Friday.
U.S. West Texas Intermediate (WTI) crude futures for August delivery rose $2.31, or 2.4%, to $99.90 a barrel after rising 1.9% in the previous session.
The US dollar fell back from a multi-year high on Monday, supporting prices of commodities such as gold and oil. A weaker dollar makes dollar-denominated commodities more affordable for holders of other currencies.
However, oil stocks remained tight, supporting prices. As expected, US President Joe Biden's trip to Saudi Arabia did not bring a commitment from the leading OPEC producer to increase oil supply.
Biden wants Gulf oil producers to increase output to rein in oil prices and bring down inflation.
The next meeting of the Organisation of Petroleum Exporting Countries (OPEC) and its allies, including Russia, collectively known as OPEC+, on 3 August will be closely watched as their existing production pact expires in September.
Global markets are focused this week on the resumption of Russian gas supplies to Euro
pe via the Nord Stream 1 pipeline, which is due to finish maintenance on 21 July. Governments, markets and businesses fear that the shutdown could be extended because of the war in Ukraine.
The loss of this gas would hit Germany, the world's fourth largest economy, hard and increase the risk of recession.
Separately, US Treasury Secretary Janet Yellen said on Saturday she had held productive talks with a number of countries on a proposed price cap on Russian oil on the sidelines of a meeting of finance chiefs from the Group of 20 major economies.
The department had said that setting a cap on the price of Russian oil was a "very complicated issue" and that the prerequisite for resolving the Ukraine crisis was to promote peace talks between the parties concerned.
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