Crude oil is becoming considerably cheaper as the first Covid-19 deaths in months in China raise fears of a tightening of its strict Corona policy by the world’s largest oil importer, and various media report an impending production increase by OPEC.
The North Sea Brent crude, which determines the price at the pump in Belgium, was $82.45 a barrel on Monday - for delivery in January. A barrel of U.S. WTI oil still cost $75.55, a price drop of more than 5.6% and the lowest price since the beginning of the year.
The drop in the price of oil is directly linked to the Covid-19 situation in China, where infections are again on the rise. Moreover, the country reported a Corona death on Saturday, for the first time in nearly six months, and two more on Sunday.
Beijing has an extremely strict Corona policy, which is unlikely to be relaxed, given the new figures. However, this policy weighs down economic growth, and therefore the demand for oil, in the world’s largest consumer and importer.
For its part, the Wall Street Journal has reported a possible production increase by members of the Organisation of Petroleum Exporting Countries (OPEC), due to the European embargo on Russian oil that goes into effect 1 December 1.
According to various media reports, Saudi Arabia and other OPEC countries, who are due to meet in early December, will push for a production increase of 500,000 barrels per day.
