Oil: Losses of more than 5% against the backdrop of Ukraine and demand in China

Oil prices fell more than 5% on Tuesday amid talks between Ukraine and Russia and demand concerns in China following a sharp rise in coronavirus cases.

In particular, the American crude press WTI April delivery fell 5.67% to $ 97.19 a barrel, while the Brent May delivery slides 6.01% to $ 100.42 a barrel.

“Expectations of positive developments in the ceasefire talks between Russia and Ukraine have strengthened hopes of reducing bottlenecks in the global crude market,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co. Ltd.

“New lockdowns to contain the pandemic in China have also raised concerns about a slowdown in demand,” he added.

It is noted that China’s Ministry of Health announced today that in the previous 24 hours 5,280 cases were confirmed, a number that is the highest since the outbreak of the first pandemic wave, in early 2020.

China, the country where the new coronavirus was first identified at the end of 2019, had previously managed to keep the epidemic under control by imposing particularly strict mitigation measures, but the Omicron variant has caused many outbreaks in recent months across the country. country.

For several days now, tens of millions of people in the most populous country in the world have been quarantined in their homes, especially in the technology metropolis of Shenzhen (south), near Hong Kong.

Meanwhile, Ukrainian President Volodymyr Zelensky said late Monday that talks with Russia, the world’s second-largest exporter of crude oil, would resume on Tuesday.

He added that he had spoken with Israeli Prime Minister Naftali Bennett as part of an effort to end the war with Russia and for a “just peace”.

“Our delegation is working on this in the negotiations with the Russian side,” Zelensky continued. “Things went well enough, they told me. But we will see,” he added, adding that talks would “continue” today.

At the same time, the US warned China after “intense” talks on Monday not to help Moscow in its invasion of Ukraine.

The head of the International Energy Agency (IEA), Fatih Birol, on Monday urged oil-producing countries to pump more oil to stabilize markets affected by the war in Ukraine.

In the same vein, British Prime Minister Boris Johnson is trying to persuade Saudi Arabia to increase oil production, a senior official said Monday, following reports that Johnson would travel to the country this week.

Meanwhile, White House spokeswoman Jen Psaki said in a statement Yesterday, Monday, there were no “active discussions at the moment” about the purchase of quantities of oil from the USA by Venezuela, during the briefing of the accredited authors.