The oil lays almost flat; recession worries rival higher demand outlook

  • IMF Managing Director Can’t Rule Out Recession
  • U.S. Gasoline Demand Expected to Rise as Driving Season Approaches
  • White House plans to tap into emergency diesel reserve
  • Shanghai aims to normalize life from June 1

HOUSTON, May 23 (Reuters) – Oil prices were little changed on Monday, settling just a little higher as worries about a possible recession rivaled prospects for higher fuel demand with the upcoming season of summer driving in the United States and Shanghai plans to reopen after a two-year period. coronavirus lockdown month.

U.S. West Texas Intermediate (WTI) crude gained 1 cent, or 0.01%, to $110.29 a barrel, while Brent futures rose 87 cents, or 0.7%, to $113.42.

“There are dark clouds gathering around the financial markets here and it has started to impact crude oil,” said Bob Yawger, director of energy futures at Mizuho.

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“The economic well-being of the global economy is questionable at this point,” he added.

Multiple threats to the global economy dominated the worries of the world’s wealthy at the annual Davos economic summit, with some signaling the risk of a global recession. Read more

International Monetary Fund Managing Director Kristalina Georgieva said she did not expect a recession for major economies, but could not rule one out. Read more

Oil losses were limited by expectations that gasoline demand would remain high. The United States was due to enter its peak driving season from Memorial Day weekend at the end of this week.

A maze of crude oil pipes and valves are pictured during a Department of Energy visit to the Strategic Petroleum Reserve in Freeport, Texas, U.S., June 9, 2016. REUTERS/Richard Carson/File Photo

Despite fears that soaring fuel prices could weigh on demand, analysts said mobility data from TomTom and Google had increased in recent weeks, showing more drivers on the road in places like the United States .

To deal with a major supply crisis and a sharp rise in prices, the White House is considering an emergency declaration to release diesel from seldom-used inventory, an administration official said. Read more

The White House plans to tap into the Northeast Heating Oil Reserve, created in 2000 to address supply issues and used only once in 2012 in the aftermath of Hurricane Sandy. The impact of such a release would be limited by the relatively small size of the reserve, which contains only 1 million barrels of diesel.

The European Union’s inability to reach a final agreement on a Russian oil ban after the country invaded Ukraine, which Moscow calls a ‘special operation’, has limited oil price gains . read more Hungary continues to resist the proposed ban, ensuring there will be no sudden supply shock. Read more

“The continued squeeze in U.S. refined petroleum products and the ever-present risk between Ukraine and Russia have supported prices,” said Jeffrey Halley, senior market analyst at OANDA.

Shanghai, China’s trade hub, aims to normalize life from June 1 as its number of coronavirus cases declines.

Lockdowns in China, the world’s biggest oil importer, have hammered industrial production and construction, prompting measures to support the economy, including a bigger-than-expected mortgage rate cut on Friday. Read more

China has said it will take targeted measures, including expanding its tax credit refunds and rolling out new investment projects, to support its economy, state television said Monday quoting the cabinet. Read more

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Additional reporting by Noah Browning in London Sonali Paul in Melbourne and Mohi Narayan in New Delhi Editing by David Gregorio and Marguerita Choy

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