WTI rebounds from $93.00, odds of lockdown in China escalates, Biden-OPEC talks in vain
- WTI has displayed signs of reversal after picking significant bids around $93.00.
- OPEC has not promised more oil supply to US President Joe Biden.
- Renewed lockdown worries in China may affect the rally in the oil prices.
West Texas Intermediate (WTI), futures on NYMEX, has attempted a rebound after hitting a low of $92.77 in the Asian session. The rebound is extremely strong and the black gold has recovered the majority of its intraday losses. The asset has picked significant bids despite the rising odds of lockdown in China and OPEC’s no promise on supplying more oil.
Covid-19 cases have increased dramatically in China. On average, the economy is displaying more than 500 new cases each day. This has escalated the odds of lockdown in China. In order to contain the spread of the pandemic, the Chinese administration has to bank upon lockdown curbs. No doubt, the restrictions on the movement of men, materials, and machines will bring a serious slump in the aggregate demand.
On the supply side, U.S. President Joe Biden's trip to Saudi Arabia has failed to bring a promise of more oil supply on the table. OPEC is in no mood in accelerating supplies in the market and a reason behind that could be the high prices. OPEC nations: Saudi Arabia and the United Arab Emirates (UAE) which carries the potential of increasing supplies are getting higher revenues amid higher oil prices and higher supply. This is going to dampen the chances of bringing price stability sooner.