By Adedapo Adesanya
The price of Brent crude slid below $85 per barrel on Monday despite easing COVID restrictions in China, raising hopes of a demand recovery in the world’s top crude importer.
The international global benchmark crude fell by $1.08 or 1.3 per cent yesterday to $84.20 a barrel, as the West Texas Intermediate (WTI) dropped $1.01 or 1.3 per cent to $78.85 per barrel amid the observance of Martin Luther King Day.
The losses printed at the market yesterday were a change of fortune after the two grades of crude oil rose more than 8 per cent last week for the biggest weekly gains since October after China abandoned what remained of its zero-COVID policy by reopening its borders on January 8.
Another good news was the expected resurgence in travel for the Lunar New Year holiday at the end of the week, which raised the outlook for demand for transportation fuels.
This will be a booster for China’s crude oil imports which fell for the second year in a row in 2022 despite a burst of purchases in the fourth quarter.
Imports for the full year by the world’s top buyer totalled 508.28 million tonnes, equivalent to 10.17 million barrels per day, 0.9 per cent lower than in 2021, according to data from the General Administration of Customs.
The United Arab Emirates energy minister, Mr Suhail al-Mazrouei, said on Monday that oil markets were balanced.
On the sidelines of the Global Energy Forum in Abu Dhabi, the minister affirmed the UAE’s commitment to providing the necessary support to ensure a balanced oil market in line with its plan to advance the 5 million barrels per day production target to 2027.
He added that there are geopolitical factors in the region and around the world that influence the global energy map, expressing his hope that the current year 2023 would see more stability in the energy markets, as well as a decline in gas prices and volatility.
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) will release their monthly reports this week, watched closely for indications on the outlook for global demand and supply.
Investors will also keep an eye on the World Economic Forum in Davos, Switzerland, which opened on Monday, and a Bank of Japan meeting this week to determine if it will defend its large stimulus policy.
Dipo Olowookere