Oil is falling due to a reduction in demand
2022.11.16 13:59
Oil is falling due to a reduction in demand
Budrigannews.com – Even a significant drop in US crude reserves does not seem to justify a recent increase in oil.
Crude futures resumed their slide on Wednesday as global supply fears intensified, propping up the market in the previous session.
Traders’ disdain for the weekly inventory data released by the US Energy Information Administration (EIA) was also surprising.
The EIA reported 5.4 million barrels. The 11-month drop came as U.S. crude imports fell by nearly 940,000 barrels per day on average over the past week, or more than 6.0 million barrels overall, versus forecasts of a 4.925 million decline in the previous week.
However, the market remained focused on the resumption of Russian oil shipments to Hungary via the Dorziba pipeline and the increase in Covid-19 infections in China.
Oil supplies to parts of Eastern and Central Europe through parts of the Doljiva pipeline were temporarily suspended for technical reasons, the Hungarian and Slovak pipeline operator said. However, Hungarian Foreign Minister Szijjarto confirmed on Wednesday that flow through the Druzhba pipeline from Russia has resumed.
West Texas Intermediate crude traded in New York and Brent crude in London suffered minor damage after an oil tanker collided off the coast of Oman, underscoring the geopolitical risks of the world’s busiest route for transporting oil.
“A number of geopolitical influences, from a bomb-laden drone attack on an oil tanker off the coast of Oman to tensions in Russia, have been largely ruled out in support of a focus on more bearish factors, such as economic data from China and sluggish demand,” Matt Smith, analyst at Kpler Oil, said in a comment to Reuters.
In China, rising COVID-19 cases weighed on sentiment after easing virus restrictions this week. Chinese authorities have closed Peking University after finding evidence of a single COVID case, an ongoing commitment to the country’s zero COVID policy.
Beijing also accounts for a small fraction of the 350 million population in the last 21-hour 24 hours, but as the Associated Press reported, China reported about 20,000 new cases this week, compared to about 8,000 a week ago.
It was down for March delivery at 1.80, or 2.1%, to 85.12 per barrel at 13:08ET (18:08GMT). Benchmark U.S. crude extended last week’s 4.4 percent decline, down 4 percent so far this week.
was1.43, or 1.5%, fell to 92.43. Global benchmark crude fell 2.6 percent on the week after last week’s 3.7 percent drop.
Aside from the pull in crude oil that it reported, the EIA’s weekly figures on fuel products leaned on the bearish side in a and a
The Biden administration’s drawdown of U.S. Strategic Petroleum Reserve crude also hit the low end, to a high of 4 million barrels from a high of 8 million over the summer.
