OIL

Oil prices fell during early Monday trading, with the barrel of Brent crude down by more than 3%. Today’s losses add to a losing streak initiated earlier in the month, as market expectations continue to shift toward a scenario of lower future demand. The main driver behind this bearish sentiment is the situation in China, where the zero-Covid policy is reducing economic activity in large parts of the country. Without an end in sight for Beijing’s stringent virus-control policies, rarely-seen popular protests started appearing in several cities, adding to the negative outlook for the Chinese economy. Against this background, unless OPEC and its allies cut production, or the US decides to replenish its strategic reserves, there may be scope for further weakness in the price of oil.

Ricardo Evangelista – Senior Analyst, ActivTrades                   

Source: ActivTrader

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