Over the last 12 days, Brent crude oil prices have dropped significantly. The price of a barrel of oil has dropped from approximately $110 at the end of July to under $90 at present. Oil prices have plunged precipitously over the past week, falling by roughly 13 percent to $88 per barrel as of Thursday's trading. However, on Friday, prices increased by three percentthe primary reason for the rise in prices was Russia threat to halt oil and gas exports to some countries.
The price rise came despite the bearish oil market dynamics. Friday’s price rise was due to supply shortage or optimistic demand. Global recession fears persist, which also goes against the persisting fears of global recession amid an overabundance of global challenges.
At the same time, concerns about Chinese demand continue to put negative pressure on markets – so not really justifying the rise in crude oil prices recently. China's continued zero-COVID lockdown policy, which has placed approximately 65 million people under a restricted mobility regime, is a negative weight on oil prices. And recently, the city of Guiyang received more lockdown orders, and the lockdown in Chengdu, China's technological epicenter, was prolonged.
Prices increased ahead of OPEC+ meeting - , the alliance of the Organization of the Petroleum Exporting Countries and other major oil producing countries. However, even, OPEC+’s decision for 100,000 bpd production cut for October 2022 did not lead to a sustained rise in prices; The prices increase was momentary and returned to bearish pattern.
So while prices rose recently, crude oil bearish sentiments have also been strongly at play. And the market expects this volatility to continue - till at least the next OPEC+ meet up later this year.
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