Wednesday, December 07, 2022

Oil fell on fears of demand after poor data from China

crude oil futures Brent -Reference to Argentina- They fell $3.05, or 3.1%, to $95.10 a barrel, After falling 1.5% on Friday. promise of US West Texas Intermediate (WTI) fell $2.68, or 2.91%, to $89.41 a barrel. After falling 2.4% in the previous session.

Brent futures were trading near their lowest levels on February 24 before Russia sent troops to Ukraine, while WTI futures on Monday hit their lowest level since the beginning of February.

The central bank of China, the world’s largest crude oil importer, Interest rates cut on loans to revive demandAt a time when data showed the economy unexpectedly slowed in July, industrial and retail activity was held back by Beijing’s zero-COVID policy and a housing crisis.

According to government data, the country’s refinery output fell to 12.53 million barrels per day (bpd), the lowest level since March 2020.

ING Bank lowered its forecast for China’s GDP growth in 2022 to 4% from a previous estimate of 4.4%, and warned that a further decline is possible.

Open interest on Brent crude this month is down 20% from August last year. “While open interest continues to decline, some (market players) are not interested in touching it due to volatility. In my opinion, the reason for this is high volume declines,” said oil analyst at UBS CEO Giovanni Stanovo. , adding that the trigger for Monday’s decline was weak data from China.

Meanwhile, the dollar index rose to the middle of its range this month. Oil is typically priced in dollars, so a stronger US currency makes the product more expensive for holders of other currencies.

Talks to revive the 2015 Iran nuclear deal also made headlines on Monday. Analysts said that crude supplies could increase if Iran and the United States accept a proposal from the European Union that would lift sanctions on Iranian oil exports.

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