During the previous session, the prices of barrels of oil fell in the world, and the sharp drop occurred due to the decrease in Chinese demand.
The value of oil, unlike many other raw materials, is significantly influenced by the “global pulse” and geopolitics, so the price of the barrel decreased, among other things, due to the expectation that an agreement on a cease-fire in Gaza could be reached, which could ease tensions in the Middle East.
But at the end of the week, new tensions arose after a deadly attack on the Golan Heights, which is under Israeli control.
On the London market, the price of a barrel of Brent dropped by more than one percent last week, to 81.13 dollars. At the same time, on the American market, the price of a barrel of WTI oil dropped by more than three percent, to 77.16 dollars.
Experts explained how the drop in demand in the world’s second largest economy affected the price of oil. Recent data, namely, indicate that China’s total fuel oil imports fell by 11 percent in the first half of 2024.
“Chinese demand is weakening, and crude oil prices are falling with it,” said Bob Yawger, director of energy futures at Mizuho in New York. He adds that the Chinese economy is in danger of entering a deflationary cycle, where prices will fall due to weakening demand: “And that is about the worst possible scenario for a country that is the largest importer of crude oil on the planet.”, Klix.ba writes.
