The price of Brent fell 6.5% to 99.91 dollarswhile the barrel of West Texas Intermediate (WTI) for delivery in April fell 6.4% to 96.44 dollars.
After dipping nearly 30% from last week’s peaks, “crude oil entered bearish territory,” commented Fawad Razaqzada of ThinkMarkets.
“China had the biggest impact” about prices on Tuesday, argued Stephen Schork of the Schork Report. The Chinese decision to order the confinement of tens of millions of people to contain covid outbreaks “clearly raises concerns in the market about demand” of crude.
China is the world’s largest importer of oil with 10 million barrels per day.
“The risk to Chinese demand is real,” Rystad Energy’s Louise Dickson said in a note, pointing to a potential drop in crude consumption of half a million barrels a day due to the lockdowns.
However, “China has shown in the past its ability to quickly contain the spread” of the virus “and the impact on energy demand has manifested itself in the short term,” said Bart Melek of TD Securities.
Black gold prices also fell in reaction to hopes that “dealings between Russia and Ukraine will lead to a de-escalation of the conflict,” according to Ricardo Evangelista of ActivTrades.
A signal from the US to Venezuela’s oil
The White House communicated through its spokesman that the United States is not maintaining “for now” contacts with Venezuela or launching any plan to import oil from that country and thus balance prices after closing the tap on Russian crude due to the invasion. from Ukraine. “It’s not something we’re actively talking about right now,” Jen Psaki said, at her daily news conference.
Last week, a high-level delegation from the US government traveled to Caracas with the intention of proposing an economic agreement to Nicolás Maduro to meet some energy demands in its economy, which sparked harsh criticism from several legislators of both parties in Congress. . Democratic Senator Bob Menéndez, chairman of the Senate Foreign Relations Committee, said the purchase of Venezuelan oil could perpetuate the humanitarian crisis in that country. “We should not breathe new life into the reign of torture and murder [de Maduro]”, Menendez said in a statement.
The trip to Caracas also created tension with one of Washington’s allies on the continent. The president of Colombia, Iván Duque, arrived on an official visit to the White House after knowing the contacts with Maduro and without him having been notified of it. After meeting with the US president last Thursday, Duque revealed that he had offered Biden the supply of more Colombian oil to stabilize energy prices, as an alternative to Venezuelan crude.
Source: Ambito
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