Oil prices increased on Tuesday on the news about the growth of number of coronavirus in China.
January futures on Brent crude oil on London’s ICE Futures Exchange fell by $0.96 (0.98%) to $96.96 per barrel by 12:51 pm (EET).
By the same time quotations of futures on WTI for December dropped by $1.19 (1.30%) to $90.60 per barrel in electronic trading on the New York Mercantile Exchange (NYMEX).
The day before Brent price went down by 0.7% and WTI, by 0.9%.
On Monday over 7 thousand new cases of COVID-19 were registered in China, which is the maximum in 6 months. In this regard, Beijing confirmed that it intends to continue mass testing and introduction of lockdowns to curb the spread of the coronavirus.
Oil demand in China, the world’s largest fuel importer, is one of the key factors influencing oil market dynamics.
“The market believes that if China opens its economy, it will sharply reduce the oil surplus in the market and put upward pressure on futures,” said Price Futures Group analyst Phil Flynn.
In addition, traders expect a partial embargo on Russian oil supplies to Europe, imposed in response to Russia’s continued full-scale war against Ukraine, to take effect soon. “Many expect the battle for free barrels to begin in December, especially in the eurozone,” said Bob Yager of Mizuho.
