The barrel price of Petroleum returned to the $90 range in the last week. The movement is linked to factors of demand expectation, which worsened with a lower-than-expected growth in China according to Paulo Furquim, a professor at Insper.
In an interview with CNN this Sunday (7), he stated that the price of oil is returning to historic levels, still above the pre-pandemic but with a trajectory of stabilization in the future.
“With the war in Ukraine, there was a stranglehold on supply that made the price go up. But the price also reacts to expectations of what will happen in the future, and now we see these projections changing”, says Furquim.
This change is due to two factors pointed out by the professor. The first was lower-than-expected growth in China, which leads to lower oil pricing as the country is the world’s largest consumer of commodities and, growing less, it tends to reduce its consumption.
In addition, he cites the reaction of central banks to the scenario of inflation uncontrolled growth, which leads to a series of increases in interest rates and a consequent deceleration of their economies, also generating lower consumption.
First factor, lower-than-expected growth in China, which surprised the market and led to lower oil prices as China is the world’s largest consumer of commodities. If it grows less, it consumes less.
With the prospect of future consumption lower than previously projected, prices decline. In this scenario, Furquim points out that the cycle of high oil prices was “interrupted”.
Source: CNN Brasil
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