London, (Business News Report)|| Crude oil prices fell on Wednesday morning due to the progress of the Russian-Ukrainian negotiations, and the state of optimism in the markets.
Fears surrounding demand in China increased with the government’s decision to close the city of Shanghai, which is the largest financial and economic center in the country, in the wake of the return of high COVID-19 infections.
Tomorrow, Thursday, the work of the monthly meeting of the ministers of the OPEC alliance and its OPEC+ partners, headed by Saudi Arabia and Russia, is scheduled to begin to review the latest data on supply and demand and oil stocks, and to discuss risks and geopolitical challenges that have a wide impact on the market.
It is expected to maintain the monthly production increase of the group of 23 products, amounting to 400,000 barrels per day, which has been applied since last August, despite pressures from consuming countries to speed up production to ease the price hike.
Analysts say that crude oil futures fell, as investors continued to worry about Chinese closures due to the rapid spread of the Coronavirus again, which could destroy energy demand in China.
For his part, Robin Noble, director of the international consulting company Oxera, says that the fluctuations in crude oil prices are still continuing and dominating the market performance, and increasingly.
He pointed out that the decline in liquidity in the futures markets, and the turbulence in the performance of financial markets had strong repercussions on the oil market.
He explained that the Chinese closure came at a precise time in which the demand for fuel was recovering strongly and greatly outpacing the growth of supply, pointing out that the Pudong Financial District in Shanghai entered its second day of strict closure.
The government also asked citizens to work from home and suspended public transportation and transportation services in general, which dealt a heavy blow to the country’s fuel consumption.