Already at the beginning of the week, oil prices had come under severe pressure. This trend continued on Tuesday. A strong US dollar in particular weighed on demand for oil.
On Tuesday, oil prices significantly extended their declines from the previous day. At noon, a barrel (159 liters) of the North Sea variety Brent cost $ 104.15. That was $1.79 less than on Monday. The price of a barrel of the US West Texas Intermediate (WTI) variety fell by $ 1.66 to $ 101.43.
Market participants partly explained the discounts on the oil market with the rising dollar exchange rate. As a result, oil became more expensive for interested parties outside the dollar area, which weighed on their demand. The commodity is traded internationally in the US currency.
China’s strict corona policy burdens the oil market
Resistance comes mainly from Hungary, which fears significant economic damage due to its high dependence on oil imports from Russia. After a visit to Prime Minister Viktor Orbán, EU Commission Head Ursula von der Leyen spoke of progress.
Russia’s war against Ukraine has pushed up oil prices and is one of the two main issues on the market. The second big topic is the strict corona policy of China.
For weeks, the political leadership has been trying to prevent the spread of the virus with strict curfews. The country’s economy is suffering from the procedure, which also provides for the closure of large parts in megacities such as Shanghai. As a result, the energy demand of the People’s Republic is significantly affected, which weighs on oil prices.