LONDON (Bloomberg) -- Oil dipped as the market remains caught between a gloomy outlook for global growth and China’s easing of Covid restrictions.
West Texas Intermediate futures traded near $88 a barrel and have been in a range of just over $10 for the last month. The dollar rose for the first time in three sessions, making commodities priced in the currency more expensive, overshadowing expectations for a rebound in Chinese demand after the nation eased some of its strict Covid Zero restrictions.
An increase in Chinese crude consumption could lead to a further tightening of the market, which is facing European Union sanctions on Russian oil flows next month, after the OPEC+ alliance initiated a round of supply cuts. However, OPEC cut its forecasts for global oil demand on Monday, bolstering the case for the cuts it agreed on last month.
U.S. Treasury Secretary Janet Yellen said that without a price cap it is likely that Russia will have to shut in some of its oil production. The European Union is “ready to go” with an effort to impose a price cap on Russian oil, according to the president of the group’s executive arm, Ursula von der Leyen, though a price level has not yet been decided.