The decline could prompt members of the Organization of the Petroleum Exporting Countries (OPEC) and its OPEC+ partners, starting with Russia, to adjust their offer and thus try to encourage prices at the meeting that will be held on Sunday.
The two world crude oil references are now very far from their levels reached in March, when they almost registered historical maximums, more than $130 a barrel, a few days after the Russian invasion of Ukraine began. Since then, WTI has lost 43% and Brent 41%.
The decline comes amid prevailing inflation, with the specter of recession looming over the United Kingdom and other countries, and an increase in covid-19 cases in China, the world’s second-largest consumer country and largest importer of crude oil.
The increase in cases of coronavirus in China, although their number remains low in relation to the 1.4 billion inhabitants that the country has, “increases the probability of a general confinement”, stressed Caroline Bain, an analyst at Capital Economics.
In addition, Beijing’s application of its “zero covid” policy, which entails massive confinements and almost daily PCR tests, “has seriously harmed the growth of the second world economy and, therefore, the demand for crude oil,” he said for his part Craig Erlam, analyst at Oanda.
Analysts do not rule out that OPEC and its partners decide to reduce their production targets again to support priceswhich are already lower than those of October, when the alliance decided to drastically cut its production quotas for November, to 2 million barrels per day.
Investors are also watching discussions about capping the price of Russian oil, advocated by a coalition of G7 countries, the European Union and Australia.
But it remains to be seen how Russia would react to this type of measure, since the Kremlin has already warned that Moscow will stop supplying oil to those who apply this initiative.
The entrance Oil falls to its lowest level this year was first published on newspaper TODAY.
