Thursday, January 26, 2023

Oil to end the year with its second annual growth despite market volatility

Like the rest of the energy markets, the ongoing war between Russia and Ukraine has also affected raw materials such as oil, In addition to the war, a reduction in demand from China, the world’s main importer of crude oil, has been added. This black mineral oil has experienced 2022 marked by vagaries in terms of its price.

As published. reutersOil reached its second consecutive annual gain this Friday in a volatile year.

Its price skyrocketed in March. Taking Brent as the world reference, The cost per barrel was $139.13, the highest level since 2008. However, the prices fell sharply in the second half of 2022 due to fears of a global recession. On this Friday, it has increased by 0.4% to $ 83.78 per barrel.

“It has been an extraordinary year for commodity markets, with supply risks exacerbated by volatility and higher prices,” says Eva Manthe, an analyst at ING. ,Next year will be another year of uncertainty with lots of volatility,

Goldman Sachs: Oil will rise to $115 a barrel in April due to supply adjustments

Total, Brent will rise 8% this 2022, followed by a 50% increase in 2021. For its part, US crude is targeting 4.6% growth in 2022, having risen 55% last year. Both references fell in 2020 due to the impact of the pandemic on demand.

“Investors enter 2023 with a cautious mindset, bracing for more rate hikes and fears of a worldwide recession,” said Craig Erlam, an analyst at OANDA brokerage. “Volatility is unlikely to abate quickly as we navigate another year of great uncertainty.”

“The global unemployment rate is projected to rise sharply in 2023, which will reduce energy demand. So I think Oil prices can fall up to $60 next year,” says Leon Lee, an analyst at CMC Markets.

Oil to fall in second half of 2022 as central banks hike interest rates to fight inflation boosted the US dollar, This made dollar-denominated commodities a more expensive investment for holders of other currencies.

Furthermore, restrictions in China due to the pandemic have dampened demand growth. The world’s second-biggest consumer has forecast a first-ever decline in oil demand in 2022.

Although China is expected to recover in 2023, the recent surge in COVID-19 cases has clouded hopes of an immediate increase in demand.

Nation World News Desk
Nation World News Desk
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