Despite China and the shutdown of an oil pipeline, oil is still falling

Oil prices experienced their fifth consecutive session of decline on Thursday, December 8, remaining indifferent to the easing of restrictions in China, the blocking of tankers in the Black Sea and the shutdown of an American pipeline. Brent crude from the North Sea for February delivery fell 1.32% to close at $76.15. It established, in session, a new low for the year, at 75.74 dollars.

As for the barrel of American West Texas Intermediate (WTI), with maturity in January, it fell by 0.76%, to 71.46 dollars. The benchmark variety in the United States had earlier fallen to $71.12, the lowest since the end of December 2021. Prices rose briefly after the announcement of the shutdown of the Keystone pipeline, which carries oil. Canadian crude to the United States, because of a leak in Kansas.

Symbolic threshold of 70 dollars

But the market ended up going back into the red, the WTI approaching the symbolic threshold of 70 dollars, which it has not crossed for nearly a year. The easing of the anti-Covid health system in China, initially presented as positive for the courses because it should allow the resumption of economic activity, is finally greeted with circumspection by the operators.

«When you reopen“the cities subject, until now, to drastic measures, “it just means that the virus will spread more quickly among the population», a argué Eli Rubin, d’EBW Analytics Group, «not that the coronavirus is gone“. With a large portion of the population unvaccinated and vaccines significantly less effective than their Western equivalents, “there is a really significant risk that the world’s largest oil importer will see its health system overwhelmedby an upsurge in new cases, warns the analyst.

Added to this is the relative disappointment caused by the decision, on Sunday, of the Organization of the Petroleum Exporting Countries (OPEC) and its allies of the OPEC + agreement to maintain their production unchanged. As for the entry into force of the price cap mechanism for Russian oil exported to destinations other than Europe, “it is an element of weakening of the coursesand not support, as imagined beforehand, according to Eli Rubin.

This system made it possible, according to the will of the United States, not to block Russian exports, whereas the package of sanctions initially adopted by the European Union planned to prohibit European insurers and carriers from participating in this activity. The market seems, for the moment, to pay little attention to the blocking of tankers loaded with Russian oil near the Bosphorus. The Turkish authorities are asking shipowners for an insurance certificate that can be used even in the event of violation of the ceiling mechanism, which the insurers refuse to provide.

According to the Marine Vessel Traffic site, a dozen ships were still stationed in the Black Sea on Thursday, with the equivalent of several million barrels on board. For Edward Moya, from Oanda, this is only a transient disturbance, “which does not change the fact that the crude demand outlook continues to deteriorate».

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