Oil falls amid fears of more lockdowns in China

Analysts who had warned of unprecedented volatility in oil trading this year were confirmed again on Monday as prices plunged lower $100 Thanks to the dealers who decided that China‘s Covid lockdowns would have a strong impact on demand.

West Texas Intermediate settled down $3.53 at the $98.54 per barrel and Brent settled down $4.33 at the $102.32 per barrel after reports of rising Covid cases Beijing and the shanghai had reported record deaths (51) every day over the weekend.

Bob YawgerDirector of Futures Department Mizuho Securities USApointed out that demand in Shanghai is declining 1.2 million barrels per day (bpd) since the start of lockdowns and a shutdown of the capital could hurt demand even more.

He called the lockdowns “the number one problem in the market right now”.

Warren PattersonHead of Raw Materials Strategy INGadding, “China’s zero-COVID policy means oil demand will take a hit as authorities try to contain the outbreak.”

The news also dropped the Shanghai Composite Index 5.1 percent and close at a 22-month low while Hong Kong’s Hang Seng Index decreased 3.7 percent and Japan‘s Nikkei fell 1.9 percentwith widespread fears that the lockdowns would exacerbate existing shipping problems and strain already ailing global supply chains.

With their prospects now viewed through a bearish lens, traders viewed previously welcomed developments in a distinctly negative light, namely: The global market is poised for additional supply through the release of strategic reserves.

Libya expectations of resuming production from closed fields added to negative sentiment, as did resuming production from Russia‘s Black Sea CPC oil terminal.

Meanwhile, the sanctions against Russia because of the invasion Ukraine continued to transform the global oil business, delivering a supertanker for the first time in over six years US rough to Spain – the latest sign of it Europe increasingly relies on states to replace conflict-related supply disruptions.

Tracking data showed that the ship Solana some delivered 2 million barrels of crude oil in Bilbao Mid-April before unloading additional oil Wilhelmshaven, Germanyand Rotterdam.

Germany is reportedly set to receive its second supertanker of US oil in May 2022.

Russia’s transactions continue to change, too, probably much to the chagrin of countries trying to punish the former Soviet Union for its aggression against Ukraine: On Monday, ship tracking data showed a total of 40 tankers were loaded 28 million Barrels destined for Russian export terminals Asia.

That quantified the average crude oil flows at sea 4 million bpd, up 25 percent against the week ending the 15th

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