Oil prices move lower on prospects of reduced demand

MOSCOW, 8 Sep — PRIME. World oil prices returned to decline on Thursday afternoon, markets are reacting to the prospects for a decrease in global demand for this type of raw material, according to trading data and expert comments.

As of 13.43 Moscow time, the price of November futures for Brent crude oil falls by 0.1%, to $87.93 per barrel, October futures for WTI – by 0.13%, to $81.84.

Oil quotes on Thursday afternoon returned to decline after some upward correction in the morning, while traders assess the prospects for a reduction in demand for this type of raw material. Thus, the negative dynamics of oil quotes is facilitated by the prospect of raising the discount rate in the United States, since, according to some experts, this may provoke a decline in economic activity in the United States and around the world, which will lead to a decrease in oil demand.

In addition, coronavirus restrictions in China continue to negatively affect the cost of “black gold”, which, in turn, also reduce demand for oil and oil products. Also, exports from China rose by 7.1% in August, while markets expected growth by 12.8%. At the same time, imports increased by 0.3%, while the growth forecast was 1.1%.

“The recession, weak Chinese export and import data and coronavirus-related restrictions are the main price drivers at the moment,” Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd, told Bloomberg.