December 12 – A faltering global economy overshadowed supply issues brought on by the suspension of a crucial pipeline supplying the United States and Russian production cut threats as oil prices fell on Monday, widening a multi-week decline.
By 0900 GMT, the price of Brent crude futures had dropped 38 cents, or 0.4%, to $75.72 per barrel.
US West Texas Intermediate crude was down 26 cents or 0.3% at $70.76 a barrel.
Over the past week, amid worries that a potential global recession may affect oil demand, Brent and WTI fell to their lowest levels since December 2021.
China’s world’s largest consumer of crude oil continued to relax its strict zero-COVID policy, even though many businesses were closed over the weekend and streets in the capital city of Beijing remained quiet.
In the Chinese cities of Beijing and Wuhan, where COVID first surfaced three years ago, lines grew outside fever clinics on Monday.
Oil markets are expected to be turbulent shortly due to concerns about how the EU embargo will affect Russian production, reports on China’s COVID strategy, and changes in central bank policies in several countries.
US and Europe,” according to a letter from UBS analysts.
According to UBS, increased demand and supply constraints should cause Brent to rise beyond $100 per barrel in the upcoming months, while OPEC+ will maintain tight supplies. In addition, Canada’s TC Energy said on Sunday that the cause of the Keystone oil pipeline leak that occurred last week in the United States has not yet been identified.
No timetable for the pipeline’s return to operation was provided.
The Keystone pipeline, which can transport 622,000 barrels of heavy Canadian crude daily to US refineries, is an essential route.
Vladimir Putin, the president of Russia, stated on Friday that his country might reduce output and would not sell oil to any nation that set a “stupid” price ceiling on Russian exports.
On Sunday, the energy minister for Saudi Arabia stated that price control measures had not yet produced any obvious results.
“The impending EU embargo on Russian crude may increase slight upward risks for energy prices in the coming months.” However, after the oil product embargo (on February 5) expires, supply uncertainties should subside by spring 2023, according to a note from Deutsche Bank.