Oil hits 1-month low as demand threatens to fall

Los oil prices registered a sharp drop again this Wednesday, to a minimum in almost a month, given the possibility that the demand yield due to the skyrocketing of Covid-19 cases in China and high temperatures in Europe and the United States.

The price of the barrel of North Sea Brent for March delivery collapsed 5.18% in London to $77.84. While the barrel of West Texas Intermediate (WTI) for February it lost 5.31% to $72.84 in New York.

The two reference varieties of the market thus closed at minimums in almost a month. At the beginning of December, crude oil reached the lowest prices since December 2021.

“Oil is failing to recover with such weak demand,” summarized Eli Rubin of EBW Analytics Group. The Covid-19 in China “It weighs on the forecasts,” he said.

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At the same time, various indicators showed a contraction in activity in Germany, Spain and France, as well as in the United States.

In this context, “it’s hard to think of a rising (oil) market,” Rubin explained.

The publication on Wednesday of extracts from the last monetary policy meeting of the Federal Reserve American (Fed, central bank), finished crushing prices, since it confirmed that interest rates will continue to rise this year.

“Warnings about the effects of aggressive rate hikes on the US economy are stirring up brokers again and oil prices continue to fall,” said Susannah Streeter of Hargreaves Lansdown.

In addition, crude oil prices are affected by abnormally high temperatures for the boreal winter in Europe and the United States these days.

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