© Archyde.com. An oil pump in Texas, USA – Photo from Archyde.com archive.
HOUSTON (Archyde.com) – It fell more than 3 percent on Thursday, as surging coronavirus cases in China weighed on demand and fears of deeper increases in U.S. interest rates.
Crude futures fell $3.08, or 3.3%, to settle at $89.78 a barrel, while US West Texas Intermediate crude fell $3.95, or 4.6%, to $81.64 a barrel.
Federal Reserve member James Bullard said that the basic monetary policy rule requires raising interest rates to about five percent at least, while the most pessimistic assumptions recommend rates above seven percent.
It rose as investors digested US economic data. A stronger dollar makes oil denominated in the greenback more expensive for buyers holding other currencies.
China recorded a daily increase in COVID-19 cases. Archyde.com said that the Chinese refineries (TADAWUL:) requested a reduction in the volume of purchases of Saudi crude in December, at a time when it also reduced the volume of purchases of Russian crude.
While the number of COVID-19 cases in China is low compared to the rest of the world, it implements strict policies to limit the spread of the Corona virus, which reduces the demand for fuel.
Poland and NATO said on Wednesday that a missile that fell in NATO member Poland may have come from Ukrainian air defenses rather than a Russian strike, alleviating fears of a widening war between Russia and Ukraine and its spread to the rest of the region.
Oil prices received some support from the official figures, which revealed that crude inventories in the United States decreased by more than the five million barrels expected in the last week.
Supplies also tightened in November as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, implemented the latest production controls to support the market.
(Prepared by Ahmed Al-Sayed for the Arabic Bulletin – Edited by Mustafa Saleh)