Oil stable ahead of Russia sanctions, Chinese demand uncertain

(London) Oil prices hesitate on Friday, between questions about the resumption of oil consumption in China and those about the impact of new Western sanctions on Russian production.


Around 5:45 a.m. (Eastern time), a barrel of Brent from the North Sea for delivery in April lost 0.09% to 82.10 dollars.

Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in March, fell 0.07% to 75.83 dollars.

China announced on Friday that it would fully reopen its borders with Hong Kong and Macau on Monday after a long lockdown due to the pandemic, ending daily traveler quotas and mandatory COVID-19 testing.

After three years of draconian sanitary measures, China abandoned its strict zero-COVID-19 policy at the beginning of December, boosting the price of black gold for a time, investors hoping for a recovery in demand from the first crude importing country in the world. world.

However, this recovery is not yet tangible due to the high degree of uncertainty remaining around the country’s epidemic situation.

“The reopening of the Chinese economy must produce stronger results” for oil to return to a strong bullish trajectory, said Han Tan, an analyst at Exinity.

In addition, the country is facing “significant economic challenges”, such as the real estate crisis which “is still not resolved”, the International Monetary Fund (IMF) said on Friday.

At the same time, new Western sanctions are due to come into force against Russia on Sunday: an embargo by the European Union on Russian refined petroleum products transported by sea, and a cap on the price of these products by the G7 countries.

A “negative” measure which will “further unbalance” the markets, lambasted the Kremlin on Friday, assuring that Russia “was taking measures to cover (its) interests against the risks that appear”.

Since the beginning of December, the EU has banned purchases of Russian crude transported by sea, and the G7 countries have established a ceiling price of 60 dollars per barrel of crude.

For Mr. Tan, these factors of uncertainty largely contributed to the decision of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) on Wednesday “to refrain from any intervention on the offer this week” and to wait for the horizon to clear up.


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