February 7, 2023


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Brent crude settles below $100/bbl on higher dollar, weak demand outlook

Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford

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  • Brent and WTI tumble by far more than $7 a barrel
  • Analysts: Recession fears, China COVID curbs harm oil
  • Dollar strengthens, stock markets drop
  • IEA: Russia oil value cap really should involve refined goods
  • OPEC forecasts slower oil desire expansion in 2023

HOUSTON, July 12 (Reuters) – Global benchmark Brent crude tumbled $7 on Tuesday to settle below $100 a barrel for the initially time in a few months on a strengthening dollar, COVID-19 curbs in major crude importer China, and climbing fears of a world financial slowdown.

The sharp fall adopted a thirty day period of volatile trading in which buyers have marketed oil positions on concerns that aggressive fascination charge hikes to stem inflation will spur an economic downturn that will strike oil demand.

Brent crude futures settled $7.61, or 7.1% reduced, at $99.49 a barrel, its lowest considering the fact that April 11. U.S. West Texas Intermediate crude was down $8.25, or 7.9%, at $95.84, also the least expensive in a few thirty day period.

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Since their peak this year in March, Brent has declined 29%, though WTI has fallen 27%.

Oil rates are struggling with extreme tension “as a defensive posture carries on with consumer sentiment nonetheless in a frustrated mode along with a COVID re-surface area in China,” explained Dennis Kissler, senior vice president for trading at BOK Fiscal.

The greenback index , which tracks the forex in opposition to a basket of 6 counterparts, also climbed earlier in the working day to 108.56, its greatest degree considering the fact that Oct 2002.

Oil is typically priced in U.S. pounds, so a more powerful dollar can make the commodity far more pricey to holders of other currencies. Buyers also are inclined to look at the dollar as a safe haven in the course of marketplace volatility.

Economic downturn fears have also pressured investors to dump petroleum-connected derivatives at a person of the speediest charges of the pandemic period. Hedge funds and other dollars supervisors offered the equal of 110 million barrels in the six most important petroleum-associated futures and possibilities contracts in the week to July 5. read through much more

Open up interest in New York Mercantile Exchange (NYMEX) futures fell on July 7 to its cheapest given that Oct 2015.

Close-to-near volatility on Brent and WTI is at its greatest amount due to the fact early April. Decreased liquidity ordinarily effects in a extra volatile industry.

Renewed COVID-19 travel curbs in China weighed on oil selling prices too, with several Chinese cities adopting refreshing limitations, from small business shutdowns to broader lockdowns, in an work to rein in new bacterial infections from a really infectious subvariant of the virus. browse more

U.S. President Joe Biden will make the scenario for bigger oil generation from OPEC when he meets Gulf leaders in Saudi Arabia this week, White House national safety adviser Jake Sullivan reported on Monday. read far more

Having said that, field insiders, sources and industry experts have questioned whether or not, with current output of at minimum 10.5 million barrels for each day, Saudi Arabia really has a different 1.5 million bpd up its sleeve that can be brought on the net speedily and sustained. go through far more

Spare ability within just Business of the Petroleum Exporting Countries (OPEC) has been managing low, with most producers pumping at utmost potential. OPEC on Tuesday also forecast that planet oil demand from customers will increase by 2.7 million bpd in 2023, a little slower than in 2022. study additional

The U.S. Electrical power Data Administration (EIA) forecast a increase in U.S. crude creation and petroleum demand in 2022 as the economic climate grows. read through extra

Crude shares rose by about 4.8 million barrels for the week finished July 8, sector resources citing American Petroleum Institute figures mentioned. Gasoline inventories also rose by 3 million barrels, according to the sources. Inventory information from the EIA is predicted on Wednesday.

U.S. Treasury Secretary Janet Yellen is in Asia to go over ways to bolster sanctions versus Russia, including a price cap on Russian oil to limit the country’s revenue and help reduce electrical power prices. browse a lot more

Global Energy Company (IEA) Govt Director Fatih Birol reported that any rate caps on Russian oil should really incorporate refined merchandise. read through additional

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Reporting by Arathy Somasekhar extra reporting by Ahmad Ghaddar in London, Florence Tan in Singapore and Emily Chow in Kuala LumpurEditing by Marguerita Choy, David Goodman, Paul Simao and Jonathan Oatis

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