Medicinal

Oil slump at the beginning of the week as the outbreak of COVID in China raises new demand concerns

Oil prices fell at the beginning of Monday week as investors turned their attention to the worsening COVID outbreak in China and the potential impact on commodity demand.

Price action
  • May delivery CL.1 West Texas Intermediate Crude Oil
    -4.03%

    CL00,
    -4.03%

    CLK22,
    -4.03%
    Contracts on the New York Mercantile Exchange on Friday fell 1.4% (4.2%) to $ 109.12 a barrel, closing at $ 113.90 a barrel, according to Dow Jones market data.

  • Brent crude oil BRN00,
    -3.54%

    BRNK22,
    -3.58%
    The global benchmark fell $ 5.09 (4.2%) to $ 112.40 a barrel. Brent rose 1.4% to $ 120.65 a barrel at ICE Futures Europe on Friday. Last week prices soared nearly 12%.

  • April Natural gas NGJ22,
    + 0.27%
    After finishing close to 15% last week, it rose 0.3% to $ 5.587 per million British thermal units.

  • April Gasoline RBJ22,
    -3.12%
    April kerosene HOJ22 rose 2.5% to $ 3.38 per gallon after rising 7.1% last week.
    -2.73%
    It fell 3.5% to $ 3.970 a gallon, and last week’s price surged more than 14%.

Market driver

China began blocking most of its financial capital and its largest city, Shanghai, on Monday. The two-stage deployment will be the most widespread as authorities confined the entire Wuhan population (the epicenter of the first outbreak) to their homes in early 2020. ..

Managing Partner Stephen Ines said: With SPI Asset Management, a note to the client.

However, Ines said oil prices are still underpinned by the unexpected disruption of oil flows at the Caspian Pipeline Consortium (CPC) terminal in Kazakhstan on the Black Sea coast of Russia. ..

“Severe weather damages two of the terminal’s three mooring systems, resulting in an outage of about 1 mb / d of crude oil, which is important in already tight market conditions. Repairs are reported to take at least a month, supporting short-term supply uncertainty and oil prices. “

Another geopolitical hotspot appeared to have cooled on Monday as Yemeni-backed rebels offered a ceasefire on Saturday. Jeddah.

Investors remained vigilant for the heightened tensions and violence against the ongoing Russian war in Ukraine and its potential impact on energy supply. Some European Union countries are so dependent on these supplies that they are resisting pressure to join the UK and US embargo on Russian oil.

Russian and Ukrainian negotiators will resume negotiations on Monday.

War in Ukraine: Zelensky accuses the coward West of blaming jets and tanks

The market is also looking forward to a meeting of OPEC and non-OPEC members on Thursday.

“Investors are wondering if OPEC will eventually increase oil production to counter Russia’s supply turmoil at this week’s conference,” said Ipek Ozkardeskaya, senior analyst at Swiss Quart Bank. “For now, we want to ban Russian oil,” he said in a note to customers.

read: Why OPEC + is likely to stick to oil production planning when it meets next week

..

About the author

Funviralpark

Leave a Comment