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By Noah Browning
LONDON (Reuters) -Oil costs dipped on Thursday however nonetheless hovered close to three-month highs after elements of Shanghai imposed new COVID-19 lockdown measures though China’s stronger-than-expected exports in Might provided a lift to the demand outlook.
Brent crude futures for August had dipped 57 cents or 0.5% to $123.01 a barrel by 1327 GMT, whereas U.S. West Texas Intermediate crude for July was at $121.26 a barrel, down 85 cents or 0.7%.
China’s Might exports jumped 16.9% from a yr earlier as easing COVID curbs allowed some factories to restart, the quickest development since January this yr and greater than double analysts’ expectations.
However whereas the Chinese language commerce figures had been upbeat, oil costs finally reversed their earlier modest good points.
“Of far better significance is information {that a} district of Shanghai has been locked down in the present day, reviving fears of one other leg of China weak spot on account of its covid-zero insurance policies. That’s capping any good points in Asia in the present day,” mentioned Jeffrey Halley, OANDA’s senior market analyst for Asia Pacific.
“That mentioned, it’s indicative of how tight provides are that oil has not retreated on that information in the present day.”
Elements of Shanghai started imposing new lockdown restrictions on Thursday, with residents of Minhang district ordered to remain residence for 2 days to manage transmission dangers.
“The export efficiency is spectacular within the context of the nation’s multi-city lockdowns within the month,” Stephen Innes, managing accomplice at SPI Asset Administration, mentioned in a word.
In the meantime, peak summer time gasoline demand in the US continued to supply a ground to costs.
U.S. gasoline shares unexpectedly dropped, information from the Power Data Administration (EIA) confirmed on Wednesday, indicating resilience in demand for the motor gas in the course of the peak summer time interval regardless of sky-high pump costs.
“It is laborious to see vital draw back within the coming months, with the gasoline market more likely to solely tighten additional as we transfer deeper into driving season,” mentioned ING’s head of commodities analysis Warren Patterson.
(Extra reporting by Florence Tan and Jeslyn Lerh; Enhancing by Jane Merriman and Kirsten Donovan)
(Solely the headline and film of this report could have been reworked by the Enterprise Normal employees; the remainder of the content material is auto-generated from a syndicated feed.)
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