Oil expert Muhammad Al-Shatti said that what happened in November and December 2019, and the closing of the Chinese stock exchange and the closing of Corona, which brought the price of oil to the level of 20 dollars, are different from the current situation. , because the markets have strong factors that drive up conflict-related prices in Ukraine and its impact on supply.
Muhammad Al-Shatti added, in an interview with Al-Arabiya, today, Monday, that in case of total closure in China, prices could drop as low as $ 80 or $ 70 per barrel due to supply concerns affecting the market.
Al-Shatti explained that China is an important card in global oil demand and any impact on it places a price ceiling and, as Corona virus infections rise in China, prices could drop below $ 100 and reach $ 70 per barrel.
The oil expert referred to a recent report by the Organization of the Petroleum Exporting Countries, which predicts that the volume of oil demand will drop from 4.2 million barrels per day to 3.7 million barrels per day. and therefore there is no return to the pandemic and a decrease in demand by 25 million barrels per day.
He explained that the Ukrainian conflict has hit the market and created fears, in light of Europe’s inability to cut Russian oil and gas due to its reliance on it, and the size of the cut so far does not exceed 700,000 barrels per year. day.
Al-Shatti said Russian exports now reach different markets, so prices have gone up to $ 140 a barrel and then dropped. in presence of strong price fluctuations.
Oil prices fell to their lowest level on Monday in two weeks, extending last week’s declines, as concerns have increased over prolonged closures due to the wave of Covid-19 in Shanghai and possible increases in US interest rates, which will hurt global economic growth and demand for oil.
In Shanghai, authorities erected fences outside apartment buildings, sparking new popular protests. And in Beijing, many have started stocking up on food, fearing a similar blockade after a few cases emerged.
Brent crude fell more than $ 5, or 5%, to $ 101 a barrel, its lowest since April 12. Meanwhile, US West Texas Intermediate crude fell $ 5, or 5%, to below $ 97.
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