Crude oil futures prices fell sharply on Tuesday (12th),WTI Crudeand Brent CrudeBoth fell below $100, hitting their lowest since April, hampered by a strong dollar and concerns that China’s coronavirus restrictions might slow demand.
energy commodity prices
- Delivered in August WTI CrudeFutures fell $8.25, or 7.9%, to settle at $95.84 a barrel, the lowest close since April 11 for recent-month WTI futures.
- Delivered in September Brent CrudeFutures fell $7.61, or 7.1 percent, to settle at $99.49 a barrel, also hitting their lowest since April 11.
- Gasoline futures for August delivery fell 5.7% to settle at $3.2646 a gallon.
- Delivered in AugustThermal Fuel FuturesPrices fell 2.8 percent to settle at $3.6626 a gallon.
- Natural gas futures for August delivery fell 4.1% to settle at $6.163 per million Btu, giving back a large portion of Monday’s 6.5% gain.
market driving force
Fears of a recession weighed on U.S. stocks and commodities trading on Tuesday, analysts said, while rising coronavirus cases in Shanghai and the threat of further lockdowns also weighed on crude as markets feared another lockdown in Shanghai.
Carsten Fritsch, commodity analyst at Commerzbank, mentioned that the Chinese authorities’ insistence on the “zero policy” of the new crown virus “means that China’s oil demand faces downside risks, because judging by the number of cases, liquidity is expected to be restricted once more. Western countries Faced with high energy prices and rising interest rates, it has heightened public fears of a recession that would severely hit oil demand.”
dollar soars,EURA relative fall to par with the U.S. dollar is detrimental to commodity prices, as it makes commodities less attractive to non-U.S. dollar buyers.
The Organization of the Petroleum Exporting Countries (OPEC) on Tuesday kept its forecast for global oil demand growth this year unchanged at 3.4 million barrels per day, with total demand expected to average 100.3 million barrels per day.
In its monthly report, OPEC expects global oil demand growth to slow to 2.7 million bpd next year, with aggregate demand expected to average 103 million bpd, “due to the still-solid economic performance of major consuming countries and the improving geopolitical situation. , and China’s containment of the coronavirus outbreak.”
US President Joe Biden will visit Saudi Arabia this weekend. Analysts believe that Saudi Arabia may be preparing to ease some production curbs somewhat, but the supply outlook is unlikely to change significantly due to this visit alone.
Tyler Richey, co-editor of Sevens Report Research, said: “Despite calls from the U.S. government to increase supply to combat high gasoline prices, estimates of international spare capacity have declined steadily in recent months as OPEC+ members have fallen significantly below their self-imposed production targets. “
Meanwhile, the Energy Information Administration (EIA) released its monthly short-term energy outlook report on Tuesday, lowering WTI and Brent CrudeAnd natural gas price expectations for this year.
The EIA is expected to release last week’s U.S. oil supply data on Wednesday. On average, analysts expect crude oil supplies to rise by 1.4 million barrels, gasoline supplies to fall by 200,000 barrels, and distillate supplies to rise by 900,000 barrels last week, according to a survey by S&P Global Commodity Insights.
