The oil market opened the week with a decrease amid tightening quarantine restrictions in China, which increased the pessimism of traders regarding the prospects for demand for fuel.
Market participants are also evaluating the potential consequences of introducing a cap on Russian oil prices. On Friday, it became known that the G7 countries intend to set a price ceiling for oil from the Russian Federation from December 5, for oil products – from February 5.
November Brent futures on London’s ICE Futures are trading at $91.45 per barrel by 8:15 a.m. on Monday, $1.39 (1.5%) lower than the closing price of the previous session. As a result of trading on Friday, these contracts rose by $3.69 (4.1%) to $92.84 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $85.3 per barrel by this time, which is $1.49 (1.72%) lower than the final value of the previous session. By the close of the market on Friday, the value of these contracts increased by $3.25 (3.9%) to $86.79 per barrel.
As a result of the past week, the cost of Brent fell by 0.2%, WTI – by 0.1%.
“It seems that expectations of weakening oil demand are coming to the fore, given the fears of a recession in the world and a delay in quarantine restrictions in China,” said oil and gas analyst RHB Investment Bank Bhd. Sean Lim, quoted by Bloomberg.
The lockdown is currently in effect in Chengdu, home to 21 million people, as well as parts of Guiyang City and at least one university campus in Beijing.
The US Treasury Department’s Office of Foreign Assets Control (OFAC) on Friday issued recommendations to insurance and financial companies regarding the implementation of the price cap initiative for Russian oil. In particular, these companies will need to obtain evidence that oil was purchased at a price below a certain level before insuring tankers.
