Oil closes slightly lower with possible increase in production and Covid in China

Oil futures closed lower in the session this Monday (21), with news of a possible increase in the production of the commodity by the Organization of Petroleum Exporting Countries and allies (OPEC+) – information contested by Saudi Arabia -, the possibility of a rail strike in the United States and the increase in cases of covid-19 in China.

On the New York Mercantile Exchange (Nymex), WTI oil for January 2023 closed down 0.1% ($0.07), at $80.04 a barrel, while Brent for the same month traded on the Intercontinental Exchange (ICE) retreated 0.2% (US$ 0.17), to US$ 87.45 a barrel.

In this second, sources of the The Wall Street Journal stated that Saudi Arabia and other oil producers from the Organization of Petroleum Exporting Countries and allies (OPEC+) are considering an increase in commodity production of up to 500,000 barrels per day.

The measure would be expected to take place one day before the embargo of Russian oil by the European Union, as a form of sanction for the war in Ukraine, and before the launch of a price limit for the Russian commodity by the G7.

The information, however, was contested by the Saudi Energy Minister, Prince Abdulaziz bin Salman.

According to Edward Moya, from Oanda, business was still influenced by a possible railroad strike in the United States, which could affect demand for the commodity.

Another factor that could affect oil consumption is the rise of Covid-19 infections in China. This Monday, the country announced the first death from the disease in almost six months, while continuing with restrictive measures to prevent further outbreaks.

“Oil didn’t stand a chance today as the supply and demand side headlines turned bearish,” Moya said, adding that oil will have trouble finding a bottom given prospects of deteriorating demand in the world’s two biggest economies. .