Oil Prices Slump To Pre-Ukraine Crisis Levels

Oil Prices Slump To Pre-Ukraine Crisis Levels

U.S. oil prices slumped on Tuesday to their lowest settlement levels of the year amid an unsteady economy, with Brent finishing below US$80 a barrel for the second time in 2022 as investors fled the choppy market.

Oil Prices Slump To Pre-Ukraine Crisis Levels. Brent crude futures decreased by US$3.33, or 4%, to close at US$79.35 a barrel. The lowest price this year was achieved by WTI crude futures, which dropped by US$2.68, or 3.5%, to end at US$74.25 a barrel.

Brent crude futures had a $3.33 (4%), or $79.35 a barrel, decrease to close. After falling $2.68 or 3.5%, WTI crude futures closed the year at their lowest price of $74.25 per barrel.

Three sessions in a row have seen more than 1% price declines, wiping off most of the year’s gains. Despite the ongoing conflict in Ukraine and one of the worst energy crises in recent memory, negative news has alarmed investors.

Statement by Kepler’s Lead Oil Analyst

“The past three days have been interesting, especially after OPEC+ decided against cutting production on Sunday. A collapse in equities markets today and a lackluster start to the Russian price cap and penalties yesterday. As investors flee risky investments, “said Matt Smith, Kepler’s lead oil analyst, speculators in oil are fleeing the market.

Oil Prices Slump To Pre-Ukraine Crisis Levels. China’s service sector activity has fallen to its lowest level in six months, and Europe’s economies have slowed due to high oil prices and rising interest rates.

The way things are going, Eli Tesfaye, senior market strategist at RJO Futures, said. “We could be looking at $60 a barrel WTI.” I believe the $80s will mark the new high, and anything higher would come as a huge surprise.

For example, the G7 price cap of $60 on Russian seaborne crude oil exports has been largely ignored by the oil market and poses a threat to supply. This cap is likely to cause Russia to reduce its oil production.

Russian Analysis

According to Russia, no one who agrees to the price cap will be able to purchase oil from them. According to Deputy Prime Minister Alexander Novak, who anticipates a slight output decline. Russia’s oil and gas condensate production increased by 2.2% from January to November compared to last year.

On Tuesday, Wall Street benchmarks also declined due to a looming recession being further discussed. Oil Prices Slump To Pre-Ukraine Crisis Levels. It is uncertainty regarding the direction of Federal Reserve rate hikes.

Read more: China Police is using Mobile Phones in COVID Protests.

Brent prices have traded in a $62 range this year, which is their widest swing in a single year since the 2008 financial meltdown. Tuesday’s slump was the biggest daily decline in Brent prices since late September.

The way things are going, Eli Tesfaye, senior market strategist at RJO Futures, said. “We could be looking at $60 a barrel WTI.” I believe the $80s will mark the new high, and anything higher would come as a huge surprise.

For example, the G7 price ceiling of $60 on Russian seaborne crude oil exports has been largely ignored by the oil market and poses a threat to supply. This cap is expected to cause Russia to reduce its oil production.

Chinese Analysis

China, the world’s largest oil importer, is expected to see increasing demand as more localities loosen COVID-19-related restrictions. However, this hasn’t been enough to arrest the decline in oil futures prices.

According to UBS analyst Giovanni Staunovo, “COVID headlines in China and central bank policies in the U.S. and Europe will likely keep oil markets volatile in the near term.”

According to market sources quoting American Petroleum Institute data on Tuesday. U.S. crude oil inventories decreased by 6.4 million barrels last week while gasoline and distillate stockpiles increased.

For example, the G7 price ceiling of $60 on Russian seaborne crude oil exports has been largely ignored by the oil market and poses a threat to supply. This cap is expected to cause Russia to reduce its oil production.

China, the world’s largest oil importer, is expected to see increasing demand as more localities loosen COVID-19-related restrictions. Oil Prices Slump To Pre-Ukraine Crisis Levels. However, this hasn’t been enough to arrest the decline in oil futures prices.

UBS Analyst Giovanni Staunovo

According to UBS analyst Giovanni Staunovo, “COVID headlines in China and central bank policy in the U.S. and Europe will likely keep oil markets unpredictable in the near future.”

According to market sources quoting American Petroleum Institute data on Tuesday. U.S. crude oil inventories decreased by 6.4 million barrels last week while gasoline and distillate stockpiles increased.

China’s service sector activity has fallen to its lowest level in six months. Europe’s economies have slowed due to high oil prices and rising interest rates.

On Tuesday, Wall Street benchmarks also declined due to a coming recession being further discussed and uncertainties regarding the direction of Federal Reserve rate hikes.

Brent prices have moved in the $62 range this year, which is their widest swing in a single year. Oil Prices Slump To Pre-Ukraine Crisis Levels. Since the 2008 financial disaster. Tuesday’s plunge was the worst daily decline in Brent prices since late September.

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