Oil prices fell by more than two dollars a barrel during trading, Monday, following a second weekly decline in a row, following countries announced plans to withdraw record quantities of crude and oil products from their strategic stocks and with continued closures in China.
Brent crude fell $2.05, or 2.0%, to $100.73 a barrel during trading, while US West Texas Intermediate crude fell $2.17, or 2.2%, to $96.09.
Brent crude fell 1.5% last week, while US oil fell 1%. Over the past weeks, the two benchmarks have been subject to the most volatility since June 2020.
China
The market is closely watching developments in China, where the authorities have kept Shanghai, a city of 26 million people, closed under a “zero tolerance” policy for Covid-19 and China is the world’s largest oil importer.
Jeffrey Haley, senior market analyst at OANDA, said: “Concerns are now growing that if the Omicron wave in China spreads to other cities, its zero-Covid-19 policy will witness extended mass shutdowns that negatively affect both industrial production and consumption. the local”.
Withdrawing from reserves
IEA member states will release 60 million barrels over the next six months, along with a similar amount from the United States as part of the 180 million barrel withdrawal it announced in March. The move aims to compensate for the shortage of Russian crude following Moscow was subjected to severe sanctions in the wake of its invasion of Ukraine.
However, it is not clear whether this will fully compensate for the Russian oil shortage as exports continue, as India has increased its imports following being tempted by deep cuts.
(Archyde.com)
