By Yasin Ebrahim

Investing.com – Oil prices moved back above $100 a barrel Tuesday as Shanghai’s move to ease some Covid-19 lockdown measures eased worries about the impact on global demand.

The New York Mercantile Exchange saw 6.7% increase to close at $100.60 a barrel, while the Intercontinental Exchange in London (NYSE:) gained 6.3% to settle at $104.64 a barrel.

Oil prices bounced back from a slump a day earlier with “the driver du jour being more optimistic speculation toward China’s lockdowns,” Scotiabank said. 

Shanghai created the three-tier system in order to stop the spread of Covid-19. This allowed some people to move out of their homes. The impact of China’s restrictions hurt travel demand and had stoked fears about global oil demand.

FGE, a consulting company, predicted that transport demand would decline by anywhere from 1.2 million to 1.5 million barrels per hour (or bpd) in the total.

Oil prices were also boosted by fresh fears about supply disruptions from Russia after President Vladimir Putin said talks with Ukraine “have again returned to a dead-end situation for us.” Putin’s remarks come after allegations that Russia committed war crimes at Bucha.

Already, the impact of either voluntary or mandatory self-sanctions by companies against Russia’s oil and gas imports is beginning to manifest. 

Russian oil-and gas condensate and crude oil production dropped below 10 million bpd, Reuters reported Monday. This was the lowest point since July 2020.

This day’s rebound in oil prices is ahead of new U.S. inventory data that will show an expected second-weekly increase in stockpiles.

Expect the weekly U.S. increase to be around 863,000 barrels in Wednesday’s official government inventory report.