Posted Apr 7, 2022, 7:28 PMUpdated on Apr 7, 2022 at 7:29 PM
Oil continues to decline. Weighted by announcements of the release of strategic reserves and the fall in Chinese demand in the midst of the recovery of the Covid epidemic, the price of a barrel of Brent fell below the 100 dollar mark on Thursday. It joins the American WTI, which preceded it by 24 hours.
around 5:45 p.m. Paris time, the European benchmark lost 2.29% to 98.73 dollars a barrel. It had not passed below this symbolic threshold since March 17. The WTI was displayed at the same time at 94.23 dollars, down 2.08%.
60 million barrels
Despite a new round of sanctions imposed on Russia, market attention remains focused on the promise of members of the International Energy Agency (IEA) – apart from the United States – to draw 60 million barrels from their emergency reserves. What contribute “to allay supply concerns”, explains Susannah Streeter, analyst for Hargreaves Lansdown.
This promise comes a week after Joe Biden’s commitment to release an additional 180 million barrels in the coming months. Since the US President’s announcement, WTI has lost almost 6%, while Brent has fallen by around 8%.
The specter of scarcity recedes
“Given these quantities, earlier concerns about supply shortages are no longer justified, as the price development also shows,” commented Carsten Fritsch, analyst at Commerzbank. However, these initiatives should not compensate for the deficit caused by the abandonment of Russian oil, expected between 2.5 and 3 million barrels per day.
Meanwhile, “lockdowns in China could offer short-term relief from high prices if consumption declines there and more supply is freed up for use elsewhere,” said CMC Markets analyst Michael Hewson. Almost all of Shanghai’s 25 million people were confined on Saturday, as China faces its worst outbreak in two years.