As speculators cashed in on last week’s surge and settled in to await this week’s market estimates from OPEC and the International Energy Agency, crude oil prices fell at the start of the week.
While West Texas Intermediate had fallen below $80 and was currently changing hands for roughly $79.30 per barrel, Brent crude was trading at just over $84.50.
After China abandoned its zero-Covid policy, which had stifled industrial development and, as a result, oil consumption for three years, the price of crude oil last week experienced its steepest weekly price increase since last October.
Last Friday, Brent crude reached a settlement price of over $85 per barrel, and WTI completed the week at over $80 per barrel, both benchmarks rising by more than 8% over the course of the week.
The current Monthly Oil Market Report from OPEC is scheduled to be released, and traders are waiting to see if the organization has updated its predictions for the year’s oil demand from last month’s report.
OPEC predicted in December that this year’s oil consumption would increase by 2.2 million BPD, down from 2.5 million BPD in 2016. A minor 300,000 BPD increase in demand from OECD nations was anticipated, whereas a 1.9 million BPD growth was anticipated from non-OECD nations. The December MOMR predicted that non-OPEC supply would increase by 1.9 million BPD this year as well.
“Now, with China opening, hopefully, we will see a pickup in demand, and when we meet, we will analyze that as usual. We always take the decision that serves the balancing of the market,” said UAE’s oil minister, Suhail al-Mazrouei, on the sidelines of the Atlantic Council’s Global Energy Forum, which took place in Abu Dhabi.
Despite the G7 price cap on Russian exports, he added, the oil market is now stable.
