The price of world crude oil strengthened significantly at the beginning of a week sales. It breaks the highest level in two months at $120 per barrel based on a reason.
That reason is a positive sentiment from China which starts to ease the COVID-19 restriction. At Tuesday morning, Brent jumped around the level of $122.27 for a barrel.
Elsewhere, WTI moved around the level of $120.06 for every barrel. At the end of last week, China’s government said that a restriction in Shanghai and other cities there will be ended.
For your information, that lockdown has been applied for the last two months and the impact is so real. It is especially for Various essential sectors such as economy, social, tourism, and so on.
This News is Welcomed Happily
The end of lockdown news becomes a positive catalyst which supports the strengthening of black gold prices. The reason is that economic activity in Shanghai as the biggest city in China will be recovered.
That soon recovery has a possibility to raise the oil demands. One of the reasons why the oil prices may increase is the end of COVID-19 restriction in Shanghai.
This kind of situation will for sure push the economy movement and most of people will drive their vehicle again. That is why; the demand of oil is going to increase as soon as possible.
Furthermore, market is now waiting for a decision made by the European Union. It is related to the Russian oil. The decision is important for market participants to take the further action.
European Union Meeting Will be Held
The rocketing price of oil was not only supported by the ease of restrictions in Shanghai. The official actions from European Union is now awaited due to the Russian oil commodity embargo.
Related to this, an European Union meeting is scheduled to be held on Monday and Tuesday. They will discuss about the sixth sanction package for Russia due to their invasion on Ukraine.
So far, the European Union countries members failed to get a solid result due to total import blockage plan for any oil and gas commodities from Russia. Basically, they agreed to give an economy sanction.
Unfortunately, not all members had the same opinion about several crucial points related to this case. That is why; the meeting needs to be scheduled again in order to get the official decision as soon as possible.
The Import Sectors may be Cut
Analysts saw a possibility that the European countries may have same overview to cut the oil and gas import from Russia. The percentage is quite high where that could be cut up to 90 percent.
This plan may be done at the end of this year. The price of this commodity can remain at it’s highest point for multi year period like what is happened recently.
Besides that, this condition can happen in some months ahead. The action of oil and gas import ban done by European union may not that good. It can tighten the world stocks which can be not good.
Meanwhile, RBNZ as a central reserve Bank of New Zealand officially do a decision. They rose their interest rate up to 50 basis point. It means that the rate is around 2.0% and continues the raise made before.
This Policy is to Face the Inflation Jump
The policy above made to face inflation which is happened in New Zealand. For your information, that inflation reaches 6.9 percent and it is the highest level in 30 years.
In a statement written by that institution, they said that the policy maker committee agrees if that raise is done aggressively. The aim is to maintain price stabilization and support the employment market continuously.
Their representatives realized that high inflation can give a bad impact on job sectors and at the end it may push the economy growth in New Zealand. A good solution must be taken for this.
