# Oil set to end turbulent 2022 modestly higher Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-12-30 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil prices set to end turbulent year with modest gains Meta Description: Stay informed with the latest updates on oil prices, including factors such as the Ukraine war, a strong dollar, and China's demand. Find out more here! URL: https://financedigest.com/oil-set-to-end-turbulent-2022-modestly-higherhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-12-30t020152z1lynxmpeibt014rtroptp4global-oil-rally-1736814658969-compressed.jpg) By Florence Tan and Emily Chow SINGAPORE (Reuters) – Oil prices edged up on Friday and were on track to post their second straight annual gains, albeit modest, in a stormy year marked by tight supplies due to the Ukraine war, a strong dollar and weakening demand from the world’s top crude importer China. Brent crude futures rose 20 cents, or 0.2%, to $83.66 a barrel by 0445 GMT, after settling 1.2% down in the previous session. Brent looked [set to end the year with a 7.6% gain](https://www.financedigest.com/european-shares-set-for-weekly-gain-on-u-s-inflation-outlook.html "European shares set for weekly gain on U.S. inflation outlook"), after jumping 50.2% in 2021. Prices surged in March to a peak of $139.13 a barrel, a level not seen since 2008, after Russia invaded Ukraine, sparking [supply and energy security concerns](https://www.financedigest.com/oil-gains-as-russian-supply-cuts-temper-concerns-over-rate-hikes-high-stocks.html "Oil gains as Russian supply cuts temper concerns over rate hikes, high stocks"). U.S. West Intermediate crude was at $78.63, up 23 cents, or 0.3%, after closing 0.7% lower on Thursday. It is on track to rise 4.5% in 2022, following a 55% [gain last year](https://www.financedigest.com/hong-kong-home-prices-drop-15-6-in-2022-snap-13-years-of-gain.html "Hong Kong home prices drop 15.6% in 2022, snap 13 years of gain"). While an increase in year-end holiday travel and Russia’s ban on crude and [oil product sales are supportive of oil prices](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop"), declining consumption due to a deteriorating economic environment next year will offset supply tightness, said CMC Markets analyst Leon Li. The global unemployment [rate is expected to rise](https://www.financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-rise.html "Oil falls as earthquake impact on crude eases, rate hike fears rise") rapidly in 2023, restraining energy demand. So I think [oil prices](https://www.financedigest.com/oil-prices-steady-as-news-of-saudi-russia-meeting-calms-investors.html "Oil prices steady as news of Saudi, Russia meeting calms investors") may fall to $60 next year,” he said. Oil prices cooled quickly in the [second half this year](https://www.financedigest.com/ericssons-board-rebuked-by-shareholders-at-agm-for-second-year-in-a-row.html "Ericsson’s board rebuked by shareholders at AGM for second year in a row") as central banks across the world hiked interest rates to fight inflation, boosting the U.S. dollar. That made dollar-denominated [commodities a more costly investment](https://www.financedigest.com/investing-in-commodities-as-a-retirement-strategy.html "Investing In Commodities As A Retirement Strategy") for holders of other currencies. Also, China’s zero-COVID restrictions, which were only eased in December, squashed [oil demand recovery hopes](https://www.financedigest.com/oil-rises-on-demand-hopes-as-banking-crisis-fears-subside.html "Oil rises on demand hopes as banking crisis fears subside") for the world’s No. 2 consumer. While China is expected to slowly recover in 2023, a surge in COVID cases in the country and [global recession concerns are clouding the commodities](https://www.financedigest.com/sp-global-acquires-firm-to-bolster-capability-to-track-commodity-shipments.html "S&P Global acquires firm to bolster capability to track commodity shipments") demand outlook. The recent easing of travel restrictions was expected to boost [oil demand; however, the sharp increase in COVID cases in China has raised serious concerns over a potential global outbreak,” John Driscoll, director at consultancy JTD Energy Services, said](https://www.financedigest.com/oil-falls-on-demand-worry-as-fed-make-or-break-moment-approaches.html "Oil falls on demand worry as Fed ‘make or break moment’ approaches"). In response to China’s [surge in COVID](https://www.financedigest.com/chinese-fret-over-elderly-as-who-warns-of-holiday-covid-surge.html "Chinese fret over elderly as WHO warns of holiday COVID surge") cases, several countries including the United States, South Korea and Japan have imposed mandatory COVID tests on travellers from China. A health [data firm](https://www.financedigest.com/dollar-firms-after-u-s-labor-data-suggests-more-rate-hikes.html "Dollar firms after U.S. labor data suggests more rate hikes") estimated that around 9,000 people in China are probably dying from COVID each day, as infections spread in the world’s most populous nation. Looking ahead on supplies, western sanctions will push Russia to divert more crude and refined products [exports from Europe](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") to Asia. In the United States, output growth in [top oil-producing states has slowed despite higher prices](https://www.financedigest.com/4-for-the-price-of-1-what-you-can-buy-in-the-uks-top-northern-cities-for-the-price-of-a-london-pad.html "4 for the price of 1: What you can buy in the UK’s top northern cities for the price of a London pad"). Inflation, [supply chain snags and economic uncertainty have led executives to lower their expectations](https://www.financedigest.com/gsk-expects-us-launch-of-rsv-vaccine-with-no-supply-issues.html "GSK expects US launch of RSV vaccine with no supply issues"), the latest survey by the Federal Reserve Bank of Dallas found. This [year has been an extraordinary year for commodity markets with supply risks leading to increased volatility](https://www.financedigest.com/crop-merchant-louis-dreyfus-gets-profit-boost-in-volatile-year.html "Crop merchant Louis Dreyfus gets profit boost in volatile year") and elevated prices,” ING analyst Ewa Manthey said. [“Next year is set](https://www.financedigest.com/japanese-yen-gains-as-ueda-set-to-be-named-next-boj-governor.html "Japanese yen gains as Ueda set to be named next BOJ governor") to be another year of uncertainty, with plenty of volatility. (Reporting by Florence Tan and Emily Chow; Editing by Muralikumar Anantharaman and Kim Coghill) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---