Oil prices fell below the $ 100 barrel on Tuesday, setting prices to rise to their lowest level since the first days of Russia's invasion of Ukraine nearly three weeks ago, as investors re-examine the sharp rise in prices seen in recent weeks.
Value action
West Texas Intermediate crude delivery of April CL.1, -8.48% CL00, -8.48% CLJ22, -8.44% dropped by $ 7.86, or 7.6%, to $ 95.15 a barrel. The resolution around that level could be very low from Feb. 25, according to FactSet Research - the day after the Russian invasion of Ukraine.
May Brent crude BRN00, -7.92% BRNK22, -7.96%, global benchmark, fell by $ 7.68, or 7.2% to $ 99.22 a barrel, on the weak living corridor since Feb. 25.
Natural gas for April NGJ22, -4.23% fell 3.4% to $ 4.502 per million British hot units.
April RBJ22 fuel, -8.35% decreased by 7.5% to $ 2.931 a liter and April HOJ22, -9.41% decreased by 8.2% to $ 3.008 a liter.
Market drivers
Prospects for Ukrainian officials' solution continued to slow oil prices on Tuesday, with the closure of COVID-19 in China, comments Carsten Fritsch, a Commerzbank analyst, wrote to customers.
“In addition, one state in northeastern China has enacted a travel ban, which may have left China's oil supply intact. In addition, India has said it intends to buy Russian oil, which is much cheaper because Western consumers refuse to buy it, ”he said.
Negotiations between Ukraine and Russia were due to continue after a compromise was reached on Monday, as Russian troops continued to beat Ukraine. Aside from the humanitarian crisis, the conflict has raised concerns about global economic growth and sent commodity prices up sharply.
In a monthly report on Tuesday, the Organization of the Petroleum Exporting Countries said it was abandoning its economic forecasts and its 2022 crude oil demand and growth demand "under test" as it warned that inflation caused by the Russia-Ukraine war could be reduced. fuel consumption.
Adding to the problems of economic growth, China's manufacturing facility southeast of Shenzhen, near Hong Kong, has been shut down due to the COVID outbreak, in addition to the closure of COVID in the northeast of the country.
Oil prices plummeted on Monday in reports that the US may lift sanctions on Venezuela's oil could ease some concerns as the war between Ukraine and Russia reaches its third week.
"Reduced oil prices are a relief when it comes to inflation expectations, but new ways to close the door [in China] will continue to exacerbate the problem of service delivery and add to the problems of inflation," said Ipek Ozkardeskaya, senior analyst at. Swissquote Bank, in a letter to customers.
New data on Tuesday showed that China's economic activity had grown significantly in the first two months of the year, despite a high level of comparison last year.
Meanwhile, data has shown hedge-fund executives have "reduced Brent oil betting to the lowest level in history," notes Naeem Aslam, senior market analyst at AvaTrade. "The retreat shows that major fluctuations in the oil market have been part of the termination of positions, as speculators close long-term contracts for WTI, diesel and the future of fuel."
"According to ICE, Brent's fall has been fueled by a sharp decline in direct betting since 2018," he said.
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Courtesy Grizler.com
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