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Oil prices fell sharply. Corona virus strikes China again

Oil prices fell sharply.  Corona virus strikes China again
  • Oil prices fell below $120 on Monday. barrel
  • This is a result of the resurgence of the topic of COVID-19 in China and the expected decrease in demand from this aspect. This time, the entire capital is blocked
  • Saudi Arabia redirects some of its supplies from China to Europe
  • You can find more of this information on the Onet homepage

In one place, the Chinese will be able to put an end to the epidemic by restrictive methods, and then it will spread to another. On Sunday, authorities warned Father. The ‘harsh’ spread of COVID-19 in the capital It announced plans to conduct mass testing in Beijing by Wednesday. This means the return of the blockade, the closure of entire cities in homes, which recently moved to Shanghai.

As a result of the expectation of a sharp recovery in the Chinese economy after the shutdown, the recovery, which began even in May after the ports opened, must be postponed again. As a result, less fuel will be sold in China, and thus global demand for crude oil will decrease. This lowers prices.

The price of a barrel of European Brent and West Texas Intermediate oil fell 2 percent on Monday. Under $120 And let us remind you of that More recently, predictions have been made of up to $175. And breaking through the historical record from June 2008 ($143.91).

On the supply side, the record price expectations came as a result of the planned blockade of Russian oil by the European Union, and on the demand side, they are the result of expectations of a recovery after the epidemic lockdowns in China. If we were to wait for that bounce, we would need less oil in the world right now.

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China remains a significant downside risk in the near term, but most analysts see the gradual normalization of Chinese demand as a strong positive for oil, despite the hype about potential disruptions in the coming weeks as current demand is far from reversing normal conditions, it was quoted Reuters on SPI. Asset Management Stephen Innes.

Oil producers and refineries are operating at full capacity to meet peak demand during the summer, while traders are watching closely the potential impact of labor disputes in Libya, Norway and South Korea on oil exports and consumption.

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