bearish oil
Crude oil prices fell during trading today, Tuesday, coinciding with the strengthening of market concerns again about the weak global demand for crude oil due to the outbreak of Corona in China and the strong closures to confront it and its potential negative impact on Chinese economic growth.
Oil prices and US crude contracts declined by 1.43% to record 104.08 dollars per barrel. At the same time, Brent crude contracts fell by 1.17% to record $1074.21 a barrel.
Crude oil prices declined significantly during trading due to concerns about the oversupply of oil in the markets, especially with the measures taken by the Chinese government to control the outbreak of the Corona virus inside the country, and this in turn may weaken Chinese demand for crude oil during the coming period.
And Bloomberg reported on Monday that the Chinese capital, Beijing, announced the closure of gyms and cinemas during the Labor Day holiday, which continues until next Wednesday. Also, lockdowns continue in Shanghai, although there are indications that the outbreak in the major financial hub has begun to subside over the past few days.
Also in this context, the National Health Commission said today, Tuesday, that China recorded 6,074 new cases of COVID-19 disease on May 2, of which 384 were asymptomatic and 5,690 were asymptomatic. The previous day, China recorded 7,822 new infections, of which 865 showed symptoms and 6,957 were asymptomatic.
Despite this, crude oil prices found support that prevented prices from collapsing in light of expectations that the European Commission will propose a sixth package of European Union sanctions, this week, on Russia due to its military operation in Ukraine, including a possible embargo on the purchase of Russian oil.
Officials said on Monday that in order to preserve the unity of the 27-nation bloc, the commission might offer Hungary and Slovakia an exemption or a long transition period on Russian oil exports, and the comprehensive ban is likely to be implemented gradually by the end of the year.
Regarding other energy sources, apart from crude oil prices, gasoline contracts fell during today’s trading by 1.26% to record $3.4661 per gallon. Meanwhile, natural gas contracts rose and recorded $7.921 per million thermal units. Heating oil contracts decreased by 0.49% and recorded about 4.1847 dollars.