The price drop was also influenced by an improvement in winter conditions in the northern hemisphere and the increase in natural gas reserves, both in Europe and in the United States.
Above-average temperatures in the US and Europe eased fears of an energy crisis at the start of winter.
In China, authorities estimated that 80% of the country’s population could be infected with coronavirus.
This determined that what was presumed to be a relaxation in the confinements in the Asian giant, now became new isolation measures.
Within this framework, manufacturing activity in China fell sharply in December as a result of the increase in infections that collapsed the demand for energy.
Investors also analyzed the statements of the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, who predicted a tough 2023, especially for Europe and China and to a lesser extent for the United States.
It is added that the Chinese factory activity contracted in December by increasing COVID-19 infections that disrupted production.
IMF Managing Director, Kristalina Georgieva, declared on Sunday that United States, Europe and Chinathe main engines of global growth, are they were slowing down simultaneouslywhich would make 2023 was harder than 2022 for the world economy.
The The market will be attentive to the minutes of the Federal Reserve’s monetary policy meeting American for December, which will be published on Wednesday. The Fed raised rates 50 basis points (bp) in December, after four consecutive hikes of 75 bp each.
“The prospect of further rate hikes will affect economic growth in the new year and, by doing so, it will curb demand for oil,” says Stephen Brennock of oil broker PVM.
Besides, U.S. December payroll data to be released on Fridaywhich are expected to show that the labor market remains tight.
The big banks reported their forecasts for oil in 2023. The most bullish vision is given by Morgan Stanley that sees Brent, a reference in Europe, at 103.7 dollars a barrel, while West Texas, a reference in the US, places it at 101.25 dollars per barrel.
In the case of Bank of America (BofA) his forecast is $100 a barrel for Brent and $94 a barrel for West Texas. Below $100 is the estimate you have made Goldman Sachswith a price for Brent of 98 dollars and 92 dollars for West Texas.
JP MorganFor its part, it sets the price of Brent crude at $96 for West Texas’s $90 a barrel. The entity that has predicted that oil prices will continue registering downward pressure and trading at 80 dollars a barrel of Brent is citiwhich puts West Texas at $75 a barrel.
Source: Ambito
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