- IMF chief says she cannot rule out recession
- Beijing ramps up COVID quarantine
- German minister expects EU embargo on Russian oil ‘in days’
- Coming up: API supply report, 2030 GMT
LONDON, May 24 (Reuters) – Oil edged higher on Tuesday, recovering earlier losses, as tight global supply and an expected pick-up in demand during the U.S. summer driving season balanced concerns over a possible recession and China’s COVID-19 curbs.
In a step that analysts say will further tighten the market, the European Union is moving closer to agreeing a ban on Russian oil imports. Such an embargo is likely to be agreed “within days”, Germany’s economy minister said on Monday.
Another source of support is U.S. gasoline demand. Memorial Day weekend travel is expected to be the busiest in two years as more drivers hit the road and shake off coronavirus lockdowns despite high pump prices.
“It’s quite a challenging market right now, but one thing is clear, it’s still extremely tight and those pressures will keep prices elevated,” said Craig Erlam, analyst at brokerage OANDA.
“Just not quite as much as it would if not for the recession warnings and Chinese COVID cases.”
Brent crude rose 18 cents, or 0.2%, to $113.60 a barrel by 1222 GMT. U.S. West Texas Intermediate (WTI) crude added 11 cents, or 0.1%, to $110.40.
Oil has surged this year, with Brent hitting $139 in March for its highest since 2008 after Russia’s invasion of Ukraine exacerbated supply concerns.
Even so, worries about threats to the global economy – a main theme of the Davos meeting this week – were behind price falls earlier on Tuesday.
“Global economic growth is precipitously declining,” said Tamas Varga of broker PVM.
Beijing is stepping up quarantine efforts to end its outbreak while Shanghai’s lockdown is due to be lifted in a little more than a week.
The American Petroleum Institute’s weekly inventory report will be in focus at 2030 GMT for a read on demand. Analysts expect lower gasoline and crude inventories.
Reporting by Alex Lawler Additional reporting by Yuka Obayashi and Isabel Kua Editing by David Goodman