By Parani Krishnan
Investing.com – For the second time in two weeks, crude oil prices fell below $ 100 a barrel.
Despite the inherent instability of Russian sanctions and OPEC sanctions, fears about Govt 2.0 in China and the doubling of price hikes are certain to make it a little harder to climb back to this year’s high of $ 140.
The global benchmark for trade and oil prices in London fell 5.24% to $ 100.59 a barrel at 15:04 (GMT) on Monday. The fall comes on the heels of last week’s 4.5% decline in Brent.
If it does not get around 7% between today and Friday, Brent will end in red – its first negative month since this year’s unique crude oil price, which started the benchmark price. On March 7, it rose to $ 139.15 two weeks later. The invasion of Ukraine prompted rapid Western sanctions against Russia, which further restricted global oil supplies.
The, traded in New York and the price benchmark in the US was down 5.15% to US $ 96.81. Like Brent, WTI fell 4.5% last week, recording a 4% first-day loss of the month. WTI rose to $ 130.50 on March 7.
A new rise in cases Govt Since the first 47 cases were discovered in the Chinese capital on Friday, the epidemic has been making headlines in the Chinese capital, Beijing, prompting millions of people to be tested for the virus, which has paralyzed residential and business districts.
Shanghai, which has been locked up for more than two weeks, has recorded more than 19,000 new infections and 51 deaths in the past 24 hours, with more than 100 deaths from the current outbreak.
In an effort to avoid a shortage that has hit Shanghai in recent weeks, more than 21 million Beijing residents have begun to stockpile food, as media coverage shows. Long queues formed in supermarkets as people bought rice, noodles, vegetables and other food, while shop staff rushed to put back empty shelves. State media reported that products were plentiful despite increased purchases in Beijing.
Until two weeks ago, Western sanctions on Russian oil – and a possible EU embargo, as evidenced by the US-Europe-Canada alliance against Moscow’s occupation of Ukraine – were the only major factor in the oil market.
While this has not changed in essence, the Covit 2.0 scenario in China is introducing a different dynamic to oil, due to the declining mobility of the world’s largest commodity importer.
This comes despite China’s over-enthusiasm for govt locks – some call it PR training – despite the insults of many energy investors, and now other parts of the world have surpassed the measures taken at the height of the epidemic over the past two years.
“The difference here is that China has the second largest economy in the world and shows no signs of surviving the virus,” said Jeffrey Haley, who leads research for the Asia-Pacific and Australia region on the online trading platform OANDA.
“Anyone who backs down on everything that President Xi Jinping says he is going to do, or on the government as a whole, will be a brave man. Considering that, the escape valve will be broken. The engine.” Chinese exporters, as well as a hole in consumer confidence. “
Apart from China, the United States also appears to be experiencing a small cov- eral renaissance, with a recent increase in the incidence of the PA2 variant, as well as two new subtypes – BA.2.12 and BA.2.12.1. Still appears contagious.
According to the New York Times Monitor, there are an average of 46,925 cases a day in the United States, up 51% from two weeks ago.
Hospitals that have been in constant decline are on the rise. The country reports an average of 15,642 hospital admissions per day, 4% higher than it was two weeks ago, but close to the lowest level since the early weeks of the epidemic.
In addition to fears about the Govt, the rally will also affect the prices of currencies, including oil.
The U.S. currency against the world’s six major currencies hit a 25 – month high of 101.745 on Monday, with the Federal Reserve expected to raise 50 basis points or half a percentage point. Policy meeting next week. This is more than double the 25 pps or 0.25% approved by the central bank in March on the first US interest rate hike of the epidemic.
The dollar will be the main beneficiary of the rise in interest rates, and the economy could be its victim.
The U.S. economy and job market have grown 5.7% last year since the 2020 Govt crash, 5.7% last year, its best rate in 40 years, and unemployment during epidemics fell from nearly 14.8% to 3.6%. March. But inflation exceeded expectations and advanced at its fastest pace in four decades.
The aggressive actions of the central bank to control inflation have raised concerns that the United States could slip into recession. However, a series of talks by central bank officials over the past week on the possibility of a reversal of the economy’s path due to the central bank’s fight against inflation have somewhat calmed market concerns. Confidence, especially about the best job market, has won some deniers. But fears that the economy will plummet have not completely disappeared.
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