Oil falls in price on risks around demand

MOSCOW, 7 Sep — PRIME. World oil prices on Wednesday morning are falling by more than 1%, investors are concerned about the prospects for demand for this type of raw material due to a number of factors, according to trading data.

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As of 8:10 Moscow time, the price of November futures for Brent crude fell by 1.49%, to $91.45 per barrel, and October futures for WTI — by 1.78%, to $85.33.

“After a short-term rise in prices to win back OPEC+ production cuts, oil prices continue to face weak demand expectations. News of China tightening due to the virus has returned the downtrend to demand forecasts, while new challenges for oil prices come from a stronger dollar United States,” Yeap Jun Rong, market strategist at IG Asia Pte, told Bloomberg.

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Oil prices approached their lowest levels since the beginning of the year, as investors fear for the demand outlook due to a number of factors, including a possible recession. World central banks are prone to raising key rates amid high inflation, while China continues to adhere to a policy of zero tolerance for the coronavirus.

Restrains oil quotes and the strengthening of the dollar. The dollar index (the exchange rate against a basket of currencies of six countries – US trading partners) rose by 0.27%, to 110.52 points. The appreciation of the US currency makes commodities, including oil, less accessible when buying in another currency.

Investors also noticed that Saudi Aramco lowered the October selling prices for oil for Asia. At the same time, OPEC + at a meeting on Monday decided to again reduce oil production by 100,000 barrels per day, returning in October to the August terms of the agreement.