WTI rises to around $80.00 following a minor drop as supply concerns intensify

Futures for West Texas Intermediate (WTI) on the New York Mercantile Exchange (NYMEX) have resumed their ascent after correcting to about $79.50 in the late New York session. After Russian President Vladimir Putin chose to impose a price ceiling on oil exports to the G7 and the European Union, supply concerns have increased. The oil price has sought to recover as a result.

Black gold is also in the spotlight despite the US Dollar Index's dismal performance (DXY). In the absence of prospective triggers, the USD index is trading flat below 104.00 despite the extreme volatility of U.S. stocks.

Previously, the G7 and the European Union capped the price of Russian oil at $60 per barrel in order to prevent Moscow from funding weaponry and ammunition for the war against Ukraine. In retaliation, Vladimir Putin passed a directive prohibiting the sale of Russian oil to nations that enforced the oil price ceiling. It will last from 1 February to 1 July.

In addition to supply concerns, China's actions to restore the economy after a protracted shutdown have injected new life into the oil bulls. Despite an increase in Covid-19 instances, the Chinese government has eliminated quarantine regulations for incoming tourists, which will reduce supply chain interruptions. Supporting the oil price is a crucial step towards reopening the economy and regaining the road of progress.

The modification of the Gross Domestic Product (GDP) projection is attributable to a new effort to eliminate restrictions on Covid-related measures in China. According to a statement made by China's National Bureau of Statistics (NBS), the agency has changed the country's GDP growth forecast for 2021 from 8.1% to 8.4%.