International oil prices, which have soared since Russia’s invasion of Ukraine, have continued to decline in the prospect of falling demand. U.S. crude oil hit its lowest level since December last year during the day on the 28th (local time).
International oil prices rebounded in part on the day, but it is predicted that the decline will continue on the prospect that oil-producing countries will push for production cuts to cope with falling demand as protests against China’s COVID-19 blockade spread.
According to CNN, the delivery of U.S. West Texas crude oil (WTI) in January next year on the New York Mercantile Exchange (NYMEX) ended at $77.24 per barrel, up $0.96 and 1.26 percent from the previous day.
During the day, WTI futures fell to $73.50 per barrel, the lowest level since December 27, 2021. WTI futures have fallen more than 10% this month.
On the London International Futures Exchange (ICE), delivery of North Sea benchmark oil Brent crude oil in January next year closed at $83.19 per barrel, down $0.44 and 0.5% from the previous day.
Brent crude futures also fell to $80.61 during the session. This is the lowest since January 10.
U.S. gasoline prices also fell as international oil prices weakened. According to the National Automobile Association (AAA), the nation’s average price per gallon of gasoline is now $3.55, down 0.3 percent from the previous day and 5.7 percent from the previous month.
International oil prices have fallen 35% since June due to China’s COVID-19 containment policy and global macroeconomic uncertainties.
As protests against the COVID-19 containment policy spread to major cities such as Beijing and Shanghai, the outlook for demand for crude oil is worsening. In China, the spread continues, with nearly 40,000 people infected with COVID-19 a day.
On the prospect of falling demand for crude oil, OPEC and OPEC+, a consultative body of non-OPEC oil producers, are expected to push for a cut in production at a regular meeting scheduled for December 4.
Earlier in October, OPEC+ agreed to cut production by 2 million barrels a day as oil prices continued to fall. This is the largest reduction in production since the outbreak of COVID-19 in 2020.