China’s lockdown madness — not the Biden Saudi trip — has driven oil prices lower

China’s lockdown madness — not the Biden Saudi trip — has driven oil prices lower

Oil prices jumped on Monday, not because of President Joe Biden’s failed attempt to urge Saudi Arabia to increase production, but because of China’s economy-crushing coronavirus lockdown and recession fears, ending a moderate price slump.

Reuters Monday noted that the past week had been a roller-coaster ride for oil, as “demand fears due to a potential slowdown and China’s lockdown” caused the biggest price drop of the summer — but then a weaker dollar, Russian threats to cut European gas supplies, and A generally tight supply of oil is pushing up prices again.

“Another spike in demand is raising concerns [Chinese coronavirus] China has weighed on oil prices recently amid a broader slowdown and resilient Russian output,” explained London-based multinational bank Barclays.

China order The massive hub cities of Tianjin and Shanghai are undergoing mass coronavirus testing on Monday, just weeks after Shanghai arose from a terrifying two-month lockdown that has caused massive economic damage to the city and its international trading partners.

Shanghai experienced some “Snap Lockdown“Since then, of individual districts, residents have been nervous that the mass testing orders could be the prelude to another devastating city-wide quarantine.

Tianjin, a major port city with a population of 14 million, was also affected Lockdown Tianjin is currently in spring time Partial lockdownRestricting travel and closing indoor spaces to control the spread of the micron form of the Chinese coronavirus.

Lockdowns in China sent oil on a similar roller-coaster ride in April and May, dragging down prices down A barrel has been below $100 for several weeks on fears of a slowdown and recession. the price come back $120 and more in May when the lockdown is lifted. There was Brent Crude transaction It was just below $104 a barrel on Monday, largely suspended due to expectations of a global economic slowdown and bad weather dampening demand from oil-hungry nations like India.

While Biden’s visit to Saudi Arabia failed to deliver on any promises of significant production growth, some analysts hopeful The Saudis and their OPEC partners could still change their minds, or receive increased supplies from some distressed oil-producing countries, notably Libya.

Barricades from the latest Covid-related lockdown block an entrance leading to Country Garden Holdings Co.’s Fengming Haishang residential development in Shanghai, China, Tuesday, July 12, 2022. (Qilai Shen/Bloomberg via Getty)

Saudi Crown Prince Mohammed bin Salman (MBS) said on Saturday that his country “will have no more capacity to increase production” after a very small potential increase that would take years to fully implement. MBS’s comments directly contradicted Biden’s unsubstantiated claim to reporters on Friday that he convinced the Saudis to increase production during a closed-door meeting.

Iraq’s Energy Minister Ihsan Abdul Jabbar said Monday that he expects oil to continue trading at $100 a barrel for the rest of this year. Iraq, which is OPEC’s second-largest producer after Saudi Arabia, hopes to bring a major new refinery online next year, significantly boosting its oil exports.

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