Oil is cheaper during Tuesday afternoon, trading by more than 1% after rising by 12% during the previous six trading sessions. The price of June Brent futures on the London ICE Futures exchange today amounted to $111.62 per barrel. WTI futures for May on the electronic trading of the New York Mercantile Exchange by this time were at $105.46 per barrel.
Black gold prices are under pressure on Tuesday due to the fact that the dollar soared to a new two-year high. A firmer dollar makes dollar-priced goods more expensive for holders of other currencies, which reduces demand.
Quotes are declining, despite the continuing problems with oil production in Libya. The production of this raw material in this North African country has decreased by more than 500,000 barrels per day due to political protests. The supply of Libyan black gold to the world market has also stopped. Apparently, the decline in production will continue. To date, work has stopped at the El Sharara field in the west of the country, where about 300,000 barrels per day were produced every day.
Recall that Libyan state oil company National Oil Corp. (NOC) reported that some persons put pressure on the workers of the El Sharara field, as a result, the extraction of raw materials at it was suspended. In the current situation, it is impossible for the NOC to fulfill its contractual obligations.
If the Libyan field remains idle for some time, the world market will not receive a significant share of supplies - 1 million barrels of oil per day.
At this time, the Chinese authorities are struggling to keep the active growth of the economy at the proper level, therefore they resume the work of their enterprises, which promises to increase the demand for fuel in the near future.
Although the growth rate of the economy in China in the first quarter was quite good, there was still no significant growth due to the introduction of strict quarantine measures in March. If it were not for the massive blockages, the growth rate of consumption and production in China in the first three months of this year would have been at a much higher level than we are seeing today. China's central bank announced a number of measures that should stimulate the volume of lending to businesses and individuals.
In addition, the European Union still intends to impose an embargo on the import of Russian grades of oil. In any case, the possibility of such an unprecedented decision is being actively discussed in the high offices of the European Parliament. It is noted that active discussions will begin only after the second round of the presidential elections in France, that is, not earlier than April 24. If such a decision is made, the supply on the world market will noticeably decrease, even despite the release of reserves by IEA members.
On Tuesday, Russia launched a full-scale offensive in eastern Ukraine, which has been expected for weeks. The Kremlin has so far given few details about this new battle, but Russian Foreign Minister Sergei Lavrov confirmed that the next stage of the military operation is beginning.