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By Zhang Mengying
Investing. com – Oil falls Tuesday morning in Asia as demand considerations were driven by the discovery in China of cases of the highly infectious subvariant omicron BA. 5.
Brent oil futures fell 1. 56% to $105. 43 at 00:44 a. m. ET (0444 GMT) and WTI crude oil futures fell 1. 67% to $102. 34.
“Growing fears of a recession and persistent weak demand in China are driving down oil prices, the existing balances between source and demand remain precarious,” Eurasia Group analysts said in a note.
Several Chinese cities are adopting new COVID-19 curbs to curb new infections, as the country has detected cases of highly infectious BA. 5 subvariant.
“While China would possibly adopt a more specific technique to try to quell any outbreak, we will have to see how this plays out given the country’s COVID 0 policy,” Warren Patterson, head of raw materials studies at ING, told Reuters.
“Overall, demand considerations continue to drive value developments. However, the basics are constructive, given the tense source situation that is expected to continue at least until the end of the year. As a result, we expect a decrease in value to be limited. “
On the other hand, Western sanctions against Russia following its invasion of Ukraine have disrupted the supply of crude oil and fuel. There have been discounts on Russia’s electric routes, benefiting investors and utilities.
Concerns about a disruption to the Caspian Pipeline Consortium(CPC) formula subsided after a Russian court overturned the resolution of pipeline operations for 30 days. The pipeline transports oil from Kazakhstan to the Black Sea, accounting for about 1% of the world’s crude supply.
Most of the manufacturers of the Organization of the Petroleum Exporting Countries (OPEC) are pumping to the maximum and depleting their reservesArrayWithout however, the president of the United States is not able to. . . U. S. President Joe Biden will advocate for higher OPEC oil production when he meets with the Gulf leader in Saudi Arabia this week, white house national security adviser Jake Sullivan said Monday.
“Saudi Arabia is not expected to load significant volumes anytime soon, despite President Joe Biden’s imminent scale, as Riyadh will prioritize its commitment to managing the market and maintaining reserve capacity for emergency losses,” Eurasia analysts said. .
Investors are now waiting for U. S. raw knowledge. The American Petroleum Institute is expected later in the day.
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