(New York) Oil prices fell sharply on Monday, depressed by a further cut in OPEC demand forecasts and a spike in COVID-19 cases in China.
A barrel of Brent North Sea oil for January delivery slid 2.96% to close at $93.14.
As for the American West Texas Intermediate (WTI), with maturity in December, it lost 3.47%, to 85.87 dollars.
“Today’s bout of weakness was primarily attributable to a reduction in demand forecasts by OPEC and nervousness over the continued offensive posture by the US central bank (Fed),” commented, in a note. , Edward Moya, analyst of Oanda.
The Organization of the Petroleum Exporting Countries (OPEC) is still counting on a marked increase in demand for black gold in 2023, as in 2022, but has reduced, in both cases, its estimate by 100,000 barrels per day.
The cartel had already cut into its forecast several times, the last time in October.
He indicated that this adjustment was attributable in particular to health restrictions in China.
The effect of the announcement on Friday of an easing of health constraints for travelers to the country was mitigated by a new upsurge in COVID-19 cases.
The National Health Commission (NHC) reported 14,409 new coronavirus cases in China on Monday, a level not seen since April.
The main focus is in Guangdong province and its capital, Guangzhou, the fourth largest city in China and subject to restrictions for several days.
“Every two weeks, if not every week, a new outbreak is announced, and each time, fears of an economic slowdown are rekindled,” notes Stephen Schork, analyst and author of the Schork Report.
Crude prices were also penalized by the slight strengthening of the dollar, after plunging for several days.
Pending a resumption of consumption of refined products with the onset of winter, prices “are moving in favor of the latest news, but the market has no clear direction”, according to Stephen Schork.
Despite the bad news on demand, prices nevertheless continue to offer a certain firmness, partly due to the forthcoming entry into force of the European embargo on Russian oil exports, at the beginning of December, according to Edward Moya.