Mexico, oil power in times of war?
4:37
New York (CNN Business) --
The oil market turmoil continues Tuesday, with crude prices rising above $100 a barrel again on concerns about Russia's loss of oil supply and signs that the lockdowns in China could be relaxed.
US crude rose 7% to $100.84 a barrel in late trading.
Brent crude, the global benchmark, rose 6.2% to $104.62 a barrel.
The sharp gains come after oil prices fell to the lowest level since the start of the war in Ukraine on Monday, in part on concerns over China's COVID-19 lockdowns hurting energy demand.
Pressure mounts in Shanghai, a city of 25 million, as covid-19 lockdowns remain in place
Though Shanghai's covid-19 cases remain high and most of the city remains under lockdown, authorities began lifting lockdown measures in some neighborhoods on Monday.
"That demand reduction event may be coming to an end. We're taking those first baby steps," said Robert Yawger, vice president of energy futures at Mizuho Securities.
At the same time, OPEC on Tuesday cut its forecast for Russian oil production in 2022 by 530,000 barrels due to the war in Ukraine and sanctions imposed on Moscow.
OPEC raised its forecast for US production this year, but only by 260,000 barrels a day.
advertising
Meanwhile, there are concerns about how to replace Russian oil that has been pushed aside in the wake of the conflict.
The OPEC leader warned European Union officials on Monday that current and future sanctions and other voluntary actions against Russia could cause the loss of 7 million barrels a day of Russian oil, Reuters reported.
"Considering current demand prospects, it would be almost impossible to replace a volume loss of this magnitude," OPEC Secretary-General Mohammad Barkindo said, according to a copy of his speech seen by Reuters.
Tom Kloza, global head of energy analysis at the Oil Price Information Service, described OPEC's 7 million barrel figure as "apocalyptic" in terms of the impact on prices.
The International Energy Agency previously warned that Russia could be forced to limit its production by 3 million barrels a day in April.
Europe turned its back on Russian coal.
Will oil continue?
The European Union reiterated on Tuesday its call for "oil and gas producing countries to act responsibly" and "examine their ability to increase deliveries to international markets."
"OPEC has a key role to play," European Commission spokesman Adalbert Jahnz said.
Kloza said the sharp ups and downs in oil prices partly reflect a lack of market participation.
"This is a lot like 2008," Kloza said, referring to the year oil prices hit record highs.
Barrel Price
