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ILO members will release 240 million barrels in 6 months The US dollar is expected to rise for the 8th day in most of May 2020 The EU is preparing proposals for an oil embargo on Russia China’s oil demand looks lower, Shanghai loosens lockdowns
NEW YORK, April 11 (Reuters) – Oil prices fell about 4% on Monday, with Brent crude falling below $ 100 a barrel amid concerns that the COVID-19 pandemic will reduce demand in China and The International Energy Agency (IEA) countries plan to release record volumes of oil from strategic reserves. The American West Texas Intermediate (WTI) closed at its lowest level since February 25, the day after Russian forces invaded Ukraine, an action that Moscow calls a “special military operation.” Brent futures fell $ 4.30, or 4.2%, to $ 98.48 a barrel, while WTI crude was down $ 3.97, or 4.0%, at $ 94.29. closure for Brent from March 16. Sign up now for FREE unlimited access to Reuters.com Register Fuel consumption in China, the world’s largest importer of oil, has stopped due to restrictions due to COVID-19 in Shanghai, said analysts at consulting firm Eurasia Group. Shanghai, China’s financial hub, began easing lockdowns in some areas on Monday, despite reporting a record 25,000 new COVID-19 cases. read more “Even when restrictions are lifted in Shanghai, China’s zero-Covid policies are likely to remain aggravating,” said the Eurasia Group, noting that Shanghai lockdowns have likely reduced China’s total oil consumption by up to 1.3 million barrels per day. day (bpd). To offset the Russian crude deficit following the Moscow strike with sanctions, ILO member states, including the United States, will release 240 million barrels of oil over the next six months. read more The release of the Strategic Oil Reserve (SPR) volumes equals 1.3 million bpd over the next six months, enough to offset a deficit of 1 million bpd in Russian oil supplies, JP Morgan analysts said. “Traffic (SPR) will be the highest ever and the back of the WTI price curve has already been broken,” said Robert Yawger, executive director of futures contracts at Mizuho, noting that spreads are slipping into contango. Contango marks an oversupply market. It is when the prices for the following months are higher than the previous month. By contrast, when supply shortages were high in early March, the WTI curve was in what Yawger called a “hyper-reversal” with at least $ 1 a barrel a month down from the previous month to November 2023. Adding pressure to crude prices, the US dollar (.DXY) was well on its way to strengthening for the eighth consecutive day against a basket of other currencies. A stronger dollar makes oil more expensive for holders of other currencies. read more In a move that could reduce global oil supplies, the European Union (EU) official is drafting proposals for an embargo on Russian oil, although no agreement has yet been reached on banning Russian crude. read more The Organization of the Petroleum Exporting Countries (OPEC) told the EU that sanctions on Russia could create one of the worst shocks to oil supplies and that it would be impossible to replace those volumes. OPEC signaled that it would not pump more oil. read more US President Joe Biden and Indian Prime Minister Narendra Modi held talks Monday as Washington pressured its Asian ally to back up its response to the Russian invasion. read more India, the world’s third-largest oil importer, has boosted Russian crude markets in recent months as Moscow has been forced to sell its oil at a big discount since invading Ukraine. Fuel demand in India rose to a three-year high in March, with gasoline sales hitting an all-time high. read more Sign up now for FREE unlimited access to Reuters.com Register Additional references by Bozorgmehr Sharafedin in London, Florence Tan and Isabel Kua in Singapore and David Gaffen in New York. Editing by David Goodman, Mark Potter, Will Dunham and David Gregorio Our role models: The Thomson Reuters Trust Principles.
