Oil prices fall on demand concerns

oil prices they had a strong fall this Tuesday, January 2, 2023 in a market distressed by a possible drop in demand due to the health situation in China and milder than normal temperatures in Europe and the United States.

(See: Oil closes a turbulent year on the rise).

The price of a barrel of Brent North Sea, for delivery in March, it lost 4.43%, to 82.10 Dollars, in London.

Meanwhile, the barrel of West Texas intermediate (WTI), for February, it gave up 4.14%, to 76.93 dollars, in New York.

(See: Oil registers a slight drop due to uncertainty due to covid-19 cases).

‘The impact of China fuels the debate in the market’, John Kilduff explainedfrom AgainCapital.

“Is it really a reopening (of economic activity, ndlr), with a pick-up in demand, or will they first have to go through a very difficult phase that will affect demand?” he asked himself.

(See: Brent and WTI prices continued to fall, this Wednesday).

British health risk analysis firm Airfinity estimates that the coronavirus caused some 161,800 deaths in China since December 1, 2022, and foresees 1.8 million daily infections and a total of 1.7 million deaths by the end of April 2023.

(See: ExxonMobil sued the EU to block taxes on oil companies).

“The near-term outlook for the Chinese economy remains grim, amid a mountain of Covid infections,” wrote in an analysis note Duncan Wrigley, from Pantheon Macroeconomics. Kilduff added the heat wave in Europe and part of the United States as a factor ‘negative‘ for demand in the middle of boreal winter.

AFP