WTI Settles Higher After Two-day Nosedive

The West Texas Intermediate (WTI) for June delivery has added 1.51 US dollars to briefly touch USD 109.77 per barrel on the New York Mercantile Exchange, later in the day the American crude oil settled at USD 105.71.

Oil closed with strong gains on Wednesday, reversing a prior-session selloff after signs of easing COVID cases in global growth engine China. CPI data in the US for April also came in hotter than expected.

West Texas Intermediate crude for June delivery CL00, +0.04% CLM22, +0.04% CL.1, +0.04% rose $5.95, or 6%, to settle at $105.71 a barrel on the New York Mercantile Exchange, after closing below $100 a barrel on Tuesday.

July Brent crude BRN00, BRNN22, , the global benchmark, rose $5.05, or 4.9%, to finish at $107.51 a barrel on ICE Futures Europe while June natural gas NGM22, +0.01% rose 3.5% to close at $7.64 per million British thermal units.

China’s daily COVID count retreated to lowest since March, news reports said. Restrictions on movement in China via a “Zero COVID” policy has fueled concerns over a growth slowdown in the world’s biggest importer of crude. That’s as supply worries are a constant backdrop for the commodity.

Morgan Stanley analysts forecast Brent oil will reach $130 a barrel by the end of 2022, with US oil hitting $120, noting that fundamentals for the commodity remain strong.

Oil remained higher after the April consumer price index showed a slowing in inflation to an 8.3% pace from a four-decade high of 8.5% in March, though the reading exceeded forecasts for 8.1% and was seen ensuring the Federal Reserve will continue to move aggressively to raise interest rates and otherwise tighten monetary policy.