On Tuesday, Brent oil futures fell below $100 a barrel for the first time since the second day of Russia’s invasion of Ukraine over three weeks ago.
Crude futures for May delivery fell 6.5 percent to $99.91 a barrel.
The price of the US benchmark West Texas Intermediate crude oil fell 6.4 percent to $96.44 a barrel.
The reduction came after China placed tens of millions of people under curfew in the aftermath of the current Covid-19 outbreak, sparking new concerns about a drop in oil consumption.
As per Louise Dickson of Rystad Energy, significant Chinese restrictions might jeopardise 500,000 barrels of oil each day.
“China’s oil demand risk is genuine,” Dickson said, adding that because oil is traded in dollars, a stronger currency also puts pressure on crude prices.
The Federal Reserve is anticipated to raise interest rates for the first time on Wednesday, potentially pushing the dollar higher.
Given the tight situation of global crude stockpiles and the persistent uncertainty surrounding Russian petroleum, Rystad cautioned that the decline in oil prices may be “short-lived.”
Following international condemnation of Russia’s invasion of Ukraine, Schneider Electric analyst Robbie Fraser said there were “increasing signs” that the country was having trouble finding consumers for petroleum.
However, given that “gasoline demand tends to be far more susceptible to prices, which in many places now sit near all-time highs” during the summer travel season, high costs might impact consumption.
Works at The Truth International Magazine. My area of interest includes international relations, peace & conflict studies, qualitative & quantitative research in social sciences, and world politics. Reach@ [email protected]
