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By Barani Krishnan
Investing. com – It’s hard to believe oil will have its worst week of five just before an OPEC assembly begins. However, as the saying goes, “that’s what it is. “
The lockdown of nearly 18 million other people at China’s Shenzhen tech hub due to a new covid scare caused crude futures to fall from Friday’s highs that first sent West Texas Intermediate and Brent crude up more than 3% on the day. crude benchmarks fell more than 6% during the week, their most depressing performance since the week ending July 29.
West Texas Intermediate, the benchmark for U. S. crude, traded in New York, gained 26 cents, or 0. 3%, to $86. 87 a barrel, after a query of $89. 61.
WTI fell in the last 3 sessions, losing 3. 3% on Thursday, 2. 3% on Wednesday and 5. 5% on Tuesday. This left the benchmark U. S. crude index down 6. 7% for the week.
Brent, the global benchmark for London industry oil, liquidated the industry on Friday up 66 cents, or 0. 7 percent, to $93. 02 a barrel, after a high of $95. 28.
Like WTI, Brent is down in the last 3 sessions, losing 4. 5% on Thursday, 2. 8% on Wednesday and 5% on Tuesday. For the week, it fell by 6. 4%.
On Friday, Shenzhen’s key districts shut down public transport and extended restrictions on public activities as China’s cities battled new coronavirus outbreaks that marred the economic recovery, Reuters said in a report.
China is the world’s largest importer and any restrictions on the movement of its population can have adverse effects on its crude consumption.
Six districts that comprise most of Shenzhen’s other 18 million people announced that all citizens would be tested for COVID-19 twice over the weekend as the subway and bus were suspended, the report added. Reuters report.
The Biden administration’s most recent grip on efforts to revive the Iran nuclear deal that could pave the way for the removal of U. S. sanctions. highs. crude in the world export market.
The White House said there is no link between the reapplication of the Iran nuclear deal and Tehran’s obligations under the Non-Proliferation Treaty.
It was the most powerful signal to date that Washington was seeking a revival of the deal reached between Iran and six world powers in 2015 under the aegis of the Obama administration. The Trump administration then canceled the deal in 2018 and imposed sanctions on Tehran. President Joe Biden, when he took office in January last year, legalized the start of negotiations in an effort to revive the deal.
The White House said Friday that there is still no deal.
“Iran’s reaction put us in a position to make a deal, because we will only make a deal if Iran complies with the situations we have established. We’re already there,” a spokesman for the White House National Security Council said in a tweet. of Iran International, a London-based television station that reports on Iranian affairs.
“It is transparent because of Iran’s reaction that gaps remain,” the tweet added.
Oil market participants said that while the language that emerged from the discussions seemed confusing, the goal of an agreement between the participants was clear.
“I think it’s going to happen,” said John Kilduff, spouse of New York-based energy hedge fund Again Capital. as news from China. “
Either way, it’s still unexpected to see such weakness in oil in the week leading up to the OPEC meeting.
The Saudi-led Organization of the Petroleum Exporting Countries and its thirteen Russian-led allies, which together are known as OPEC, will meet on Monday, when U. S. markets are closed for the Labor Day holiday.
Initially, expectations were high that OPEC would push for a production cut at the assembly to boost oil costs and offset recent crude losses.
However, in recent days, top analysts have eased expectations after OPEC published an improvement in the call for the outlook for its oil. The alliance of 23 major oil exporters halved its 2022 surplus estimate to 400,000 barrels a day, while forecasting a deficit. of 300,000 bpd by 2023.
The staggered outlook call suggests that OPEC is confident about its oil sales and keeping production as it is.
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