On September 01, the prices of crude oil declined for the third consecutive day amid demand fears sparked by renewed coronavirus restrictions in China.
This prospect added to worries that the soaring inflation and interest rate are denting fuel demand.
At the time of writing, the West Texas Intermediate futures are trading lower by 2.10% to $87.69 per barrel. Likewise, the global benchmark Brent contracts are fluctuating by 2.20% to $93.54 a barrel.
In August, Asia’s factory activity slowed as Beijing’s zero-Covid curbs and cost pressures continued to dampened businesses. These odds are darkening the outlook for the region’s weak economy.
As coronavirus infections continued to rise, Southern Chinese tech hub Shenzhen tightened its restrictions with large events and indoor entertainment suspended for three days.
Meanwhile, a feasible renewal of a 2015 Iran nuclear deal, which would allow the OPEC member to uplift its oil exports, also weighed on crude prices.
On Thursday, French President Emmanuel Macron stated that he anticipates the deal to be concluded in the coming days.
In addition, OPEC said that its output hit 29.60 million barrels a day in the most recent month and US production increased to 11.82 million in June.
Oil prices to steady through 2022
A group of analysts forecasted that crude prices would hold steady for the rest of the year but will marginally decline in 2023.
After the Russia-Ukraine war broke out in February, global oil prices soared to more than $120.00 per barrel. However, it began to decline below $100.00 a barrel in recent weeks.
One of the main reasons is a possible recession on the back of rising interest rates. During this period, oil prices tend to plunge.
According to a JPMorgan analyst, crude will plummet to an average of $101.00 per barrel in the second half of 2022 and would further fall to $98.00 in 2023.