The Price Of Oil In The US Has Dropped To Its Lowest Level In Almost A Year
The price of oil in the US has dropped to its lowest level in almost a year because people are worried that protests in China against Covid-19 lockdowns will lower demand. West Texas Intermediate crude oil futures, which are the US standard, fell 2.7% on Monday and are now trading close to $74 per barrel, which is a price level that hasn't been seen since December 2021.
Author:Suleman ShahReviewer:Han JuNov 29, 2022552 Shares92K Views
The price of oil in the US has dropped to its lowest level in almost a yearbecause people are worried that protests in China against Covid-19 lockdowns will lower demand.
West Texas Intermediate crude oil futures, which are the US standard, fell 2.7% on Monday and are now trading close to $74 per barrel, which is a price level that hasn't been seen since December 2021. Brent crude futures, which are used as a global standard, fell 2.9% and are now trading close to $81 per barrel. It hasn't been that low since January.
Since June, global oil prices have dropped by about 35%. This is because China's strict restrictions on coronavirus have kept demand low, and some of the world's biggest economies have shown signs that they are heading toward a recession.
This has helped bring down the price of gas for drivers in the United States.
The AAA says that the average price of a gallon of gas across the country is now $3.55, which is down 0.3% from yesterday and 5.7% from last month. The Energy Information Administration says that the price of crude oil has the most effect on the price of gasoline in the US.
Thousands of people from all over China took to the streets over the weekend to protest the country's "zero-Covid" strategy.
A deadly apartment fire in the Xinjiang region was one of the things that led to the protest. Videos of the event seemed to show that lockdowns made it take longer for firefighters to get to the victims.
Even though OPEC+, a group of major oil producers, is cutting production by 2 million barrels per day starting this month, global oil prices have gone down. This is the biggest cut since the pandemic began. On Sunday, OPEC+ will get together again.
Since Russia invaded Ukraine at the end of February, millions of homes and businesses around the world have had trouble paying their rising energy bills. Falling fuel prices have helped them out.
A Price Cap In Russia Is Coming
But the markets are still nervous because the West is trying to come up with a price cap for Russian oil. Major developed economies are fighting over the level of the cap, which is meant to limit Moscow's income without seriously affecting the supply of oil around the world.
Last week, newsstories said that the price of Russian oil could be capped at between $65 and $70 per barrel, which is close to what it is worth on the market right now. Still, Russia wouldn't feel much pain at that level.
But if the Western powers decide to lower the price, it could make the global energy crisis worse, especially if Russia takes action in response. Moscow could decide to cut production by more than expected, which would raise prices and make inflation worse around the world.
Craig Erlam, a senior markets analyst at Oanda, said in a note on Monday:
“„It’s looking increasingly likely to be done at a level that doesn’t particularly hinder Russia’s ability to sell crude - which is contributing to the drop in oil prices - or put its buyers in an uncomfortable position.- Craig Erlam, a senior markets analyst at Oanda
The price cap is set to go into effect on December 5, the same day that the European Union puts a ban on importing crude oil from Russia by sea.
Analysts at Deutsche Bank said on Monday that they thought the EU embargo would cause a "moderate supply risk" between January and March of next year, but that the effect would likely be lessened by Russia's desire to make as much money as possible from exports.
Suleman Shah
Author
Suleman Shah is a researcher and freelance writer. As a researcher, he has worked with MNS University of Agriculture, Multan (Pakistan) and Texas A & M University (USA). He regularly writes science articles and blogs for science news website immersse.com and open access publishers OA Publishing London and Scientific Times. He loves to keep himself updated on scientific developments and convert these developments into everyday language to update the readers about the developments in the scientific era. His primary research focus is Plant sciences, and he contributed to this field by publishing his research in scientific journals and presenting his work at many Conferences.
Shah graduated from the University of Agriculture Faisalabad (Pakistan) and started his professional carrier with Jaffer Agro Services and later with the Agriculture Department of the Government of Pakistan. His research interest compelled and attracted him to proceed with his carrier in Plant sciences research. So, he started his Ph.D. in Soil Science at MNS University of Agriculture Multan (Pakistan). Later, he started working as a visiting scholar with Texas A&M University (USA).
Shah’s experience with big Open Excess publishers like Springers, Frontiers, MDPI, etc., testified to his belief in Open Access as a barrier-removing mechanism between researchers and the readers of their research. Shah believes that Open Access is revolutionizing the publication process and benefitting research in all fields.
Han Ju
Reviewer
Hello! I'm Han Ju, the heart behind World Wide Journals. My life is a unique tapestry woven from the threads of news, spirituality, and science, enriched by melodies from my guitar. Raised amidst tales of the ancient and the arcane, I developed a keen eye for the stories that truly matter. Through my work, I seek to bridge the seen with the unseen, marrying the rigor of science with the depth of spirituality.
Each article at World Wide Journals is a piece of this ongoing quest, blending analysis with personal reflection. Whether exploring quantum frontiers or strumming chords under the stars, my aim is to inspire and provoke thought, inviting you into a world where every discovery is a note in the grand symphony of existence.
Welcome aboard this journey of insight and exploration, where curiosity leads and music guides.
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