© Archyde.com. Oil prices back down!Increase in cases may curb demand, focus on API inventory within days
Investing.com – In the European market on Wednesday (28th), oil prices fell, investors opened the market worried that the increase in cases in China may curb demand.
As of 19:18 Beijing time (06:18 am Eastern Time), Investing.com Commodity Markets showed: down 75 cents, or 0.94%, to $78.78/barrel; down 69 cents, or 0.81%, At $83.99 a barrel. It fell 4.63 percent to $4.881.
Oil prices hit a three-week high on Tuesday (27th) after China announced earlier this week that it would end quarantines on entry from early next year.
However, while the oil market was clearly the big winner from China’s easing of entry restrictions, some investors opened with concerns that rising cases could curb fuel demand in the short term.
At the same time, many Western economies entered theRecessioncould also hit energy demand.
The euro zone faces a “very difficult economic situation” that will be a major test for individuals and businesses, European Central Bank Vice President Luis de Guindos said on Tuesday.
In addition, the supply situation is also unclear. Much of the U.S. is still gripped by a cold snap, with refineries shutting down widely due to snowstorms.
Russian President Vladimir Putin also announced that oil sales to countries adhering to the Group of Seven (G7) price cap will be banned from February 1.
ING analysts said, “How the Russia-Ukraine war evolves will be important to the oil market in 2023. Although the detente of the war may not restore the pre-war oil trade pattern, it will remove a large amount of supply risk in the market. “
In the U.S., data on U.S. crude oil inventories will be released tonight, and inventories are expected to decline, continuing last week’s sharp drop of 3 million barrels.
ING noted that “the mentality of U.S. producers has undergone a major shift from producing as much as possible to focusing on shareholder returns and, as a result, continues to show discipline in capital expenditures. At the same time, due to supply chain issues, labor shortages and Costs are rising and supply is expected to grow only modestly next year.”
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Compiler: Liu Chuan