Oil: more than 10% drop over the week for WTI

(Boursier.com) – New sharp decline in crude oil prices this Friday. The barrel of WTI for December delivery dropped 4.2% to 78.2 dollars on the Nymex, bringing its losses over the week to more than 10%. The barrel of Brent from the North Sea (January maturity) is not left out since it fell 3.5% to $86.6 in London in an environment marked by an increase in Covid cases in China and Central banks still very hawkish despite the slowdown in inflation last month in the United States.

To make matters worse, crude is trading below several key moving averages, triggering so-called technical selling, amid elevated speculative long positions. “There’s a lot of confusion in this market right now,” Amrita Sen, an oil analyst at consultancy Energy Aspects, told Bloomberg TV. “Yeah, demand in China is weak and that’s something we’ve been saying for some time… The thing is, demand from the rest of the world is actually pretty decent.”

“As things stand, bullish drivers are rare,” adds Stephen Brennock at PVM. “Yet with the EU embargo on Russian crude less than three weeks away, oil prices could still end the year on a high note.”

Despite the strong uncertainty on the consumption of black gold, OPEC + agreed to lower its production by 100,000 bpd in October before agreeing to a reduction of 2 mbd from November, despite the opposition from several countries, including the United States. The next cartel meeting, the last of 2022, is scheduled for December 4 in Vienna.