The prices of WTI remain stable during the Asian session on Wednesday, after a volatile session on Tuesday where the price of black gold fell -2.52% in the face of fears of low demand due to the new confinements in China and the new sanctions on Russia.
Investors show their nervousness and move oil prices in both directions, during the European session on Tuesday they had risen just over 2 dollars after the Minister of Industry of Japan Koichi Hagiudawould say that the International Energy Agency (IEA) was still discussing a coordinated release of oil reserves, which boosted crude prices as markets thought that was pretty much a done deal.
Already for the American session, crude oil prices began to fall due to the strength for the fourth consecutive session of the dollar in the international context that has led it to reach maximum levels of 2020 due to expectations of a more aggressive monetary policy by the Federal Reservein order to control inflationary pressures in the USA.
Another factor putting downward pressure on crude oil prices are concerns about a future low demand for fuels after the government of the main oil importer, Chinaextended the confinement in Shanghai to cover the 26 million inhabitants of the financial center, as a measure of its policy of “Zero Covid” at a time when infections already amount to more than 10,000 new cases daily.
In addition to the fears Chinaadded to the concerns of lower oil supplies in the face of new sanctions by the USA and the members of the European Union they proposed sweeping new sanctions against Russia over the deaths of civilians in Ukraine, including a euro zone ban on coal imports.
Although the sanction could at one point benefit oil, since it can work as an alternative to coal, the markets erased the possible optimism, after the comments of the Minister of Foreign Affairs of Germany, Annalena Baerbockwho said the coal ban will be followed by oil and then gas.
Raphael Quintana, Senior Analyst at Metadoro, considers that the volatility and uncertainty in oil prices will continue until there is greater certainty in the progress in the peace talks between Ukraine and Russia and improvements in the containment of contagion in China.
For now, we must be attentive to the official crude oil inventories in the USApublished by the International Energy Agency (IEA)which is forecast to report a decrease of -2,056 million barrels.
metador considers that, for the moment, the WTI remains within the bearish channel formed since March 23, 2022, if black gold continues to fall, it can break the level of 100 dollars again.
Source: Goodly Media
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