© Reuters. An oil pump in Texas, USA – Photo from the Reuters Archive.
HOUSTON (Reuters) – It fell more than 3% on Thursday as surging coronavirus cases in China weighed on demand and fears of deeper interest rate hikes in the United States.
Crude futures fell $3.08, or 3.3%, to $89.78 a barrel, while US West Texas Intermediate crude fell $3.95, or 4.6%, at $81.64 a barrel.
Federal Reserve member James Bullard said the ground rule of monetary policy requires raising interest rates to at least about five percent, while the most pessimistic assumptions recommend rates above seven percent.
It rose as investors digested US economic data. A stronger dollar makes greenback-denominated oil more expensive for buyers holding other currencies.
China has seen a daily increase in COVID-19 cases. Reuters said Chinese refiners (TADAWUL:) called for a reduction in the volume of Saudi crude purchases in December, at a time when they also reduced the volume of Russian crude purchases.
While the number of COVID-19 cases in China is low compared to the rest of the world, it implements strict policies to limit the spread of the Corona virus, which reduces fuel demand.
Poland and NATO said on Wednesday that a missile dropped on NATO member Poland could have come from Ukraine’s air defenses rather than a Russian attack, easing fears of a spreading war between Russia and Ukraine and its spread to the rest of the region.
Oil prices got some support from official data, which revealed that US crude stockpiles fell by more than the five million barrels expected in the past week.
Supplies also fell in November as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, implemented the latest production controls to prop up the market.
(Prepared by Ahmed Al-Sayed for the Arab Bulletin – Edited by Mustafa Saleh)
