The price of benchmark Brent crude fell $4.78, and reached $102.32 a barrel, while US West Texas Intermediate crude fell $4.91, to $99.18 a barrel, following falling to $98.40 a barrel during the session.
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There are fears of a global economic slowdown
Oil prices fell sharply on Tuesday, as restrictions were imposed to contain “Covid-19” in China, the world’s largest oil importer, and amid fears of a global economic slowdown.
By 11:12 GMT, the benchmark Brent crude price fell $4.78, or 4.5 percent, to $102.32 a barrel, and US West Texas Intermediate crude fell $4.91, or 4.7 percent, to $99.18 a barrel, following falling to $98.40 a barrel during session.
In conjunction with, The euro fell today, close to parity with the dollar While stock markets fell with the expectation of raising interest rates and concerns regarding the economic conditions in various parts of the world.
A higher dollar usually affects oil prices because it makes dollar-denominated crude more expensive for holders of other currencies.
Several Chinese cities are implementing new restrictions to contain “Covid-19”, from closing some companies to complete closure to contain new infections with the emergence of the new sub-mutant (Omicron PA 5.2.1), which is rapidly spreading.
US President Joe Biden will call on the Organization of the Petroleum Exporting Countries (OPEC) to increase production when he meets with Gulf leaders in Saudi Arabia this week.
“There is little hope that Biden’s visit to Saudi Arabia will increase production from it (Saudi Arabia) or the UAE,” said Jeffrey Haley, senior market analyst for the Asia-Pacific region at Oanda.
The spare production capacity of the member countries of the Organization of Petroleum Exporting Countries (OPEC) is declining, as most producers are pumping to their full capacity.
Western sanctions imposed on Russia over the Russian military operation in Ukraine have disrupted commercial flows of crude oil and fuel.
“OPEC” expects global demand for oil to rise by 2.7 million m barrels per day in 2023, a slightly slower rate than its rise in 2022, in light of supporting consumption through better containment of the epidemic and global economic growth that is still strong.
