Oil prices fell to near their lowest levels this year
Oil prices fell to near their lowest levels this year on Monday as street protests against strict Covid-19 curbs in China, the world’s biggest crude importer, stoked concern about the outlook for fuel demand. Brent crude dropped $2.66, or 3.1 per cent, to trade at $80.97 a barrel at 1000 GMT, after diving more than 3 per cent to $80.61 earlier in the session — its lowest since January 4.
US West Texas Intermediate (WTI) crude slid $2.39, or 3.1 per cent, to $73.89 a barrel. It fell as far as $73.60 earlier, its lowest since December 22, 2021. Both benchmarks, which hit 10-month lows last week, have posted three consecutive weekly declines. Markets appeared volatile ahead of an Opec+ meeting this weekend and a looming G7 price cap on Russian oil.
The Organization of the Petroleum Exporting Countries (Opec) and its allies including Russia, known as Opec+, will meet on December 4. In October, Opec+ agreed to reduce its output target by 2 million barrels per day through 2023.
Meanwhile, G7 and EU diplomats have been discussing a price cap on Russian oil of between $65 and $70 a barrel, with the aim of limiting revenue to fund Moscow’s military offensive in Ukraine without disrupting global oil markets.
But EU governments were split on the level at which to cap Russian oil prices, with the impact being potentially muted.