Brent Oil Erases All 2022 Gains As It Dips Below $80
- Brent lost nearly all of the gains it made in 2022, settling below $80 on Tuesday for the first time since early January.
- The difference between the highest and lowest price at which Brent has traded is $62, the largest range since 2008.
- The fall in oil prices has been driven by fears that demand will get crushed amid a global economic slowdown.
Brent Crude prices settled below $80 per barrel on Tuesday and continued to trade below that level early on Wednesday in Asian trade, erasing all the gains from 2022 as it plunged to the lowest level in a year. The last time Brent had settled below $80 per barrel was in early January this year, more than a month before the Russian invasion of Ukraine which roiled global energy markets and sent crude oil prices above $100 per barrel in the spring.
Early on Wednesday in Asian trade, Brent Crude traded at $78.00, down by over 2%, and WTI Crude was trading below $73 per barrel
The range of highest and lowest trades of oil prices this year has been a massive $62, which is the biggest oil trading range in one year since the 2008 financial crisis.
Although the EU embargo and the price cap on Russian crude came into effect earlier this week, the main headline in the oil and equity markets has been the general economic slowdown globally with gloomier predictions of the state of the economy in recent days. In addition, oil traders and speculators are fleeing the market at the end of the year amid high volatility and uncertainty. Moreover, the structure of the oil futures market is showing signs of sluggish global oil demand and sufficient supply. In Asian trade early on Wednesday, “There was no decisive upward momentum from bargain-hunting buying despite prices plunging to their levels lowest in a year after three consecutive sessions of a sharp sell-off,” Vanda Insights said. “The mood in the broader financial markets further soured after major Wall Street banks warned of rough economic headwinds at an industry conference on Tuesday.” Ed Moya, Senior Market Analyst at OANDA, said on Tuesday, “The crude demand outlook is getting crushed as we are in a slowdown basically across all the major economies. Supplies seem plentiful over the near-term and that has everyone hesitating on what was one of the easiest trades of the year.” NN:
Oil cap designed not to impact global price – US
The upper limit to the price of Russian oil set by the West is not expected to have a material impact on the global price and “that was by design,” United States National Economic Council Director Brian Deese claimed on Tuesday, noting that it seems the global market sees it the same way. However, he told reporters aboard Air Force One that the White House will continue to monitor developments that could arise as a consequence of the price cap decision, including the reported backlog of tankers in Turkey. Turning to the domestic labor market, Deese described it as “historically strong” and pointed out that it is “normalizing,” but also “generating” job opportunities in the process. NN: any oil cap is designed to affect supply AND of course supply affects price. For now the cap is to high and its bringing more supplies. As we speak the shadows fleet of over 100 grey market tankers are upping their insurance and the Russia oil will flow for now. Oversupply is the order of the day. Once they scratch their ass and understand the fuck up Europe and the US will modify the price caps and by late spring excess inventories will be bled off and it off to the races once again!!