Oil expert, Muhammad Al-Shatti, said that what happened in November and December 2019, China’s closure of the stock exchange and the closures of Corona that… Oil prices fell For the $20 level, it differs from the current situation, because the markets have strong price-enhancing factors related to the conflict in Ukraine and its effect on supply.
Muhammad Al-Shatti added, in an interview with Al-Arabiya, today, Monday, that in the event of a complete closure in China, prices may fall to 80 or 70 dollars per barrel, due to supply concerns that affect the market.
Al-Shatti explained that China is an important card in the global demand for oil, and any impact on it places a ceiling on prices, and with the increase in Corona virus infections in China, prices may fall below $100 and reach $70 a barrel.
The oil expert referred to a recent report issued by the Organization of the Petroleum Exporting Countries, which expects the volume of demand for oil to decrease from 4.2 million barrels per day to 3.7 million barrels per day, and therefore there is no return to the pandemic and a decrease in demand by 25 million barrels per day.
He explained that the Ukrainian conflict affected the market and created fears, in light of Europe’s inability to cut off Russian oil and gas due to its dependence on it, and the size of the cut so far does not exceed 700,000 barrels per day.
Al-Shatti said that Russian exports reach different markets now, and therefore prices rose to 140 dollars per barrel and then declined in the presence of a large fluctuation in prices.
Oil prices fell to their lowest level in two weeks on Monday, extending last week’s declines, as concerns increased over prolonged shutdowns due to the Covid-19 wave in Shanghai, and possible increases in US interest rates, which will hurt global economic growth and demand for oil.
In Shanghai, authorities erected fences outside apartment buildings, sparking new popular protests. And in Beijing, many have begun stockpiling food, fearing a similar lockdown after a few cases emerged.
Brent crude fell more than $5, or 5%, to $101 a barrel, its lowest since April 12. Meanwhile, US West Texas Intermediate crude fell $5, or 5%, below $97.