Meanwhile, a barrel of Brent from the North Sea for delivery in February, it lost 4.02% to $79.35, below $80 for the first time since January.
“The potential effect of a new series of rate hikes (by the US central bank) generated fear in the market, due to its possible repercussions on the world economy”summed up Susannah Streeter, of Hargreaves Lansdown.
A sharper rate hike could weaken demand for crude oil and push prices down further. Added to this panorama is the uncertainty about the health situation in China, the world’s largest importer of crude oil, with a slow lifting of anti-covid restrictions.
The strengthening of the dollar also contributed to the bearish trend of the market. The barrel, quoted in dollars, becomes more expensive for investors in other currencies.
On the other hand, some traders were disappointed by the Opec+ alliance’s decision on Sunday to maintain their production levels, said Bart Melek of TD Securities. A) Yes, “the market is concerned that there is too much supply” globally, the analyst finished.
In addition, there were operators who “they positioned themselves to buy”, betting on major disturbances after the entry into force of the European embargo on Russian crude transported by sea on Monday, and the setting of a ceiling for the price of oil from that origin, explained Bill O’Grady of Confluence Investment.
“Nothing of what they expected happened and that led to a wide liquidation” of positions, that is, a massive sale by speculative traders, which pushed prices down, O’Grady added.
But this weakness in crude could be short-lived, says the specialist. The embargo and price ceiling for Russian crude “will end up disrupting” the flow of oil from that source, he said.
For Russian deliveries to destinations other than Europe, European carriers and insurers, essential players in the market, will not be able to operate unless the buyer respects a maximum price of $60, according to the agreement reached by the 27 bloc countries.
Source: Ambito
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