Dear clients,
Oil is gaining momentum as China takes more steps in easing its zero-covid policy and abnormal weather in the US has led to the closure of refineries in a key Texas Gulf Coast region. More than a third of capacity has been closed in the past few days, including two of the largest US plants. Last week, oil rose by more than 7%, after the Vice Premier of the Russian Federation announced a possible reduction in production by 700,000 barrels per day.
WTI moved up to $80 a barrel after Beijing announced it would lift mandatory quarantines for arriving travelers from early January. China has also downgraded the Covid-19 alert level a notch, effectively removing the legal justification for aggressive restrictions.
Oil should be moderately higher than 2021 levels by the end of the year. This year, the prices have been hit by global unrest, fears of a recession in major economies and the recent wave of covid in China as restrictions are being reduced.
