Oil prices opened higher as the U.S. dollar rose

Oil prices opened slightly higher on Tuesday after falling sharply the previous session on fears that continued Covid-19 lockdowns in China would eat into demand and the U.S. dollar rise to a two-year high.

Brent crude futures were at $102.74, up 42 cents, or 0.4 percent, while West Texas Intermediate contracts in the United States were at $98.77, up 23 cents, or 0.2 percent.

Both contracts had dropped around 4% on Monday, with Brent falling as much as $7 a barrel during the session.

Lockdowns in Shanghai to combat Covid are now in their fourth week. Meanwhile, orders for mass testing, including in Beijing’s central shopping district, have fueled fears of more Shanghai-style lockdowns. The impact of Chinese lockdowns is estimated to be over a million barrels per day, and the testing of 12 areas over the next five days will determine the next significant swing in crude prices.

The U.S. dollar also reached a two-year high on Monday, making oil more expensive for holders of foreign currencies.

Supply concerns are not the primary focus of energy dealers, and a rising currency adds additional pressure on all commodities. Unfortunately for Reclaim Finance and all other climate campaigners, drilling a new oil well or building a new coal mine is the regular course of action when energy demand exceeds available supply. And this is precisely what businesses are doing in some regions of the world where climate activism isn’t as powerful. Even in Europe, certain governments, most notably the United Kingdom and Germany, are revisiting their climate plans.

The United Kingdom reconsidered its intention to progressively cease all oil and gas exploration in the North Sea amid an energy crisis that began last autumn, causing energy prices to skyrocket and pushing millions of homes into energy poverty.