Oil prices opened September with a drop of more than 3% on Thursday, as new lockdown measures due to new outbreaks of the Covid-19 in China added to concerns that high inflation and interest rate hikes of central banks affect the demand for fuel.
US benchmark West Texas Intermediate (WTI) lost $2.94, or 3.3%, to $86.61 a barrel, while European benchmark North Sea Brent fell $3.28, or 3.43%, to $92.36 a barrel.
The Mexican export mix, for its part, fell by 3.40 dollars or 3.96%, to close the session at 82.56 dollars per barrel.
Gabriela Siller, director of Economic Analysis at Banco Base, explained that the drop in international oil prices on the first day of September was due to concerns about global economic activity, which worsened after this Thursday the The Chinese government decided to impose new confinements in the city of Chengdu (in the southwest of the country) due to a resurgence of Covid-19 in the area.
“Demand for oil in the Western world, as well as in China, is stagnant, while supply is expanding, largely thanks to the US shale oil boom,” said Julius Baer analyst Norbert Rucker.
Adding to the Chengdu closures, factory activity in Asia plummeted in August as China’s Covid-19 restrictions and cost pressure continued to hurt businesses, according to surveys released on Thursday. which casts a shadow over the prospects for the region’s fragile recovery.
In addition, the technology hub of southern China, Shenzhen, tightened restrictions due to Covid-19 in the face of an increase in cases. Large events and indoor shows in the city’s most populous district, Baoan, were suspended for three days.
The dollar strengthens
Another factor that affected oil prices was the strength of the dollar.
In that sense, the dollar index hit a 20-year high on Thursday after data showed a resilient US economy, giving the Federal Reserve (Fed) more room to raise the benchmark interest rate.
A stronger greenback makes oil more expensive in dollars for buyers of the raw material with other currencies.
“China is undergoing another round of Covid lockdowns at its major export terminals,” said Dennis Kissler, Senior Vice President of Trading at BOK Financial, which along with the “super strong dollar is causing a sell-off in U.S. crude futures.” money”.
From its highs of March 8, when they exceeded 120 dollars per barrel, WTI falls almost 30%, Brent declines 27.83%, while the Mexican mix plummets 30.98 percent. In the year, they still accumulate a rise of between 13.80 and 17.27 percent.
termometro.economico@eleconomista.mx
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