Adedapo Adesanya
By Adedapo Adesanya
Brent went down by 1.2 per cent or $1.02 on Tuesday to $83.05 per barrel as concerns about global economic growth outweighed supply curbs and an expected bounce in the European economy.
Also, the US West Texas Intermediate crude (WTI) depreciated by 0.2 per cent or 18 cents to settle at $76.16 per barrel.
Earlier in the session, the market rallied, with Brent briefly turning positive after better-than-expected business activity surveys in Europe and Britain pointed to a less gloomy European economic outlook than previously feared.
According to a survey on Tuesday, there was enough evidence to show that the European Union could escape a recession.
S&P Global’s flash Composite Purchasing Managers’ Index (PMI) for the 20 countries that use the Euro, seen as a good gauge of the bloc’s overall economic health, climbed to a nine-month high of 52.3 in February from January’s 50.3.
Another survey showed businesses in the United Kingdom, which has exited the bloc, reporting an unexpected bounce in activity as well as receding price pressures, suggesting the economic outlook across Europe may be less gloomy than predicted.
However, pressure from the US Dollar mauled the optimism. A stronger greenback makes dollar-denominated oil more expensive for holders of other currencies.
On Monday, oil prices rose by more than 1 per cent on optimism over Chinese demand that analysts expect to rebound this year after COVID-19 restrictions were scrapped.
The market is also looking at Russia, which plans to cut oil production by 500,000 barrels per day, equating to about 5 per cent of its output, in March after the West imposed price caps on Russian oil and oil products.
Russia is part of the OPEC+ producer group comprising the Organisation of the Petroleum Exporting Countries (OPEC) and allies, which agreed in October to cut oil production targets by 2 million barrels per day until the end of 2023.
The cut, announced this month, will apply only to March output for now, Deputy Prime Minister Alexander Novak said on Tuesday.
