Concerns over an increase in Omicron variant cases around the world drove down global oil…
Oil prices are falling due to concerns about Chinese demand and a strong dollar.
On Tuesday, oil prices fell to their lowest level in two weeks, as demand concerns arose from ongoing coronavirus limitations in China, the world’s second-largest oil user, as well as a spike in the US dollar index, which makes dollar-priced oil more expensive for buyers.
At 0659 GMT, international benchmark Brent crude was trading at USD105.31 a barrel, down 0.59 percent from the previous session’s close of USD105.94.
At the same time, the American benchmark West Texas Intermediate (WTI) was trading at $102.59 per barrel, down 0.48 percent from the previous session’s closing of $103.09 per barrel.
Brent plummeted to USD102.60 a barrel in the previous session, the lowest level in two weeks, due to rising demand concerns as millions of Chinese residents in Shanghai, Beijing, and elsewhere suffer draconian lockdowns.
As China tightened measures to curb the spread of coronavirus sickness, export growth slowed to single digits, the slowest in two years (Covid-19).
Rising fears of high-interest rates impeding economic development are also hurting investor appetite for risk, amidst geopolitical tensions caused by the Russia-Ukraine conflict and China’s ongoing harsh pandemic measures.
Dollar-indexed oil prices are also being pressed by the US dollar index. The index, which compares the value of the US dollar to a basket of currencies such as the Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, peaked at 103.77 before settling at 103.59.
EU sanctions on Russian oil are still in place.
Since the start of the Russia-Ukraine conflict on February 24, global oil markets have been under supply pressure.
Western countries continue to hammer Russia with sanctions aimed at crippling its economy, the most recent of which is expected to target Russian oil exports.
Negotiations among EU member states over the sixth sanctions package against Russia, which includes a ban on Russian oil imports, have stalled after Hungary, Slovakia, and the Czech Republic, which are heavily reliant on Russian energy imports, expressed reservations about the European Commission’s proposal and asked to opt out.
Despite the fact that the draft included for a phase-out period for Hungary until the end of 2024, the Hungarian government has been resolute and vociferous in its opposition to the oil embargo.
Bulgaria said on Sunday that it will not accept the EU’s new sanctions against Russia unless the Balkan country is exempted from the proposed ban on importing Russian oil.
The revised version of EU sanctions is anticipated to eliminate the ban on EU tankers carrying Russian oil, following pressure from Greece, Cyprus, and Malta.