Oil prices are falling on Monday amid a general decline in investor appetite for risk in connection with information about the ongoing protests in China against covid restrictions.
As Bloomberg reports, protests were held in cities across the country, including the capital Beijing, as well as Shanghai, Xinjiang and Wuhan, which was originally the epicenter of the spread of COVID-19.
That contributes to a stronger U.S. dollar, which reduces the attractiveness of investing in commodities and also raises the possibility of even more significant tightening of restrictions by Chinese authorities, the agency said.
The value of January futures on Brent crude oil on London’s ICE Futures Exchange by 7:10 a.m. KSC on Monday was $81.31 per barrel, down $2.32 (2.77%) from the previous session’s close. Those contracts fell by $1.71 (2%) to $83.63 per barrel at the close of trading on Friday.
The price of WTI futures for January crude oil fell by $2.31 (3.03%) to $73.97 per barrel at electronic trading on the New York Mercantile Exchange (NYMEX). By closing of previous trades the cost of these contracts fell by $1.66 (2.1%) to $76.28 per barrel.
Brent fell 4.6% and WTI fell 4.8% at the end of last week.
“The outlook for the oil market remains unfavorable and the events of this weekend in China do not add to the positive,” said Warren Patterson, who is in charge of commodity strategy at ING Groep NV in Singapore.
According to the forecast of analytical company Kpler, oil demand in China in the fourth quarter will decrease to 15.11 million barrels per day (bpd) from 15.82 million bpd a year earlier.
