There has been a major sell in crude markets todays driven by concerns by China’s COVID unrest raising uncertainty whether China will impose further measures to contain the outbreak of Covid-19 in its zero Covid policy. China’s economy is expected to grow by 3.3% in 2022 and by 4.5% in 2023, compared with more than 6% prior to the Covid pandemic a major concern for global oil demand.
Additional factors include delayed G7 price cap on Russian oil, as the EU struggles to have a united view on Russian energy imports, expected return of Venezuelean crude and winter decline in demand.
Last week, US Petroleum product demand fell 1.2 million bpd w/w with more than 400kbpd drop in gasoline demand.
This means OPEC+ meeting next week in Vienna is coming at a very critical time and I personally expect additional cuts.
We spoke to Al-Arabiya on these market developments.