International oil prices drop due to protests in China WTI hits lowest level in a year

Article Summary

WTI recorded $73.50 during the intraday… Lowest since December 2021
Prospects for production cuts in oil-producing countries amid spread of protests against China’s coronavirus lockdown

[골드스미스=AP/뉴시스] The sun sets behind an operating oil rig and pump jack outside Goldsmiths, Texas, on the 9th (local time). 2022.03.10.

[서울=뉴시스] Reporter Lee Jong-hee = International oil prices, which soared after the Russian invasion of Ukraine, are showing a continuing downward trend due to the prospect of a decrease in demand. U.S. crude oil hit its lowest level since December last year at one point on the 28th (local time).

International oil prices rebounded on the day amid the prospect that oil-producing countries will push for production cuts to respond to a drop in demand as protests against the COVID-19 containment in China spread, but the downward trend is expected to continue.

According to foreign media such as CNN Business, on the New York Mercantile Exchange (NYMEX), West Texas Intermediate (WTI) for January delivery next year finished at $77.24 per barrel, up $0.96 or 1.26% from the previous day.

During the session, WTI futures fell to $73.50 per barrel, the lowest level since December 27, 2021. WTI futures are down more than 10% this month.

At the London International Futures Exchange (ICE), Brent crude, the North Sea reference oil for delivery in January of next year, closed at $83.19 per barrel, down 0.44 dollars or 0.5% from the previous day.

Brent crude futures also fell to $80.61 at one point during the market. This is the lowest since January 10th.

As international oil prices weakened, US gasoline prices also fell. According to the National Automobile Association (AAA), the national average price per gallon of gasoline is now $3.55, down 0.3% from the previous day and 5.7% from the previous month.

International oil prices have seen a 35% drop since last June due to China’s containment policy against Corona 19 and global macroeconomic uncertainty.

Protests against the COVID-19 containment policy have spread to major cities such as Beijing and Shanghai, worsening the outlook for crude oil demand. In China, the spread continues, with nearly 40,000 confirmed cases of COVID-19 per day.

It is predicted that the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil producing countries OPEC+ will push for production cuts at a regular meeting scheduled for December 4 in view of the prospect of a decrease in crude oil demand.

Earlier in October, OPEC+ agreed to cut production by 2 million barrels per day as oil prices continued to decline. This is the largest production cut since the outbreak of COVID-19 in 2020.

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