Down nearly 3 percent, world oil prices hit lows for all of 2022

NEW YORK, KOMPAS.com – World oil prices recorded a drop in trading on Wednesday (7/12/2022) local time or Thursday morning (8/12/2022) Indonesian/WIB time. Price movement raw oil the world was dulled by rising US fuel inventories and rising Chinese oil imports in November.

To collect CNBCBrent crude prices fell 2.8% to $77.17 a barrel and West Texas Intermediate (WTI) fell 2.4% to $72.01 a barrel.

World oil prices fell to their lowest level this year and lost all gains since the Russian invasion of Ukraine exacerbated a decades-long global energy supply crisis.

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The market continued to decline in the final months of the year as economists braced for the potential for weaker global economic growth, in part due to high energy costs. Wednesday’s losses were led by a larger-than-expected increase in fuel inventories in the United States.

The recent declines contradict what should be a supportive background for the price. China, the world’s largest importer of crude oil, has announced the biggest change since the start of the pandemic.

The country’s crude oil imports in November rose 12% from a year earlier to hit a 10-month high, data showed. The G7 countries have started implementing price caps to limit Russia’s exports, which could prompt the country to cut production in the next year.

The Energy Information Administration noted that U.S. distillate inventories increased by 6.2 million barrels, far exceeding an estimated 2.2 million barrel increase. Gasoline inventories rose 5.3 million barrels versus expectations for a 2.7 million barrel increase.

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Meanwhile, at least 20 tankers lined up from Turkey faced delays in crossing from Russian Black Sea ports to the Mediterranean due to the implementation of insurance rules, as well as the introduction of a cap on the price of Russian oil by the countries of the G7.

The Russian newspaper Vedomosti reported that the government is currently considering the option of banning the sale of oil to several countries to counter the price limits imposed by the West.

“Today there is still a lot of uncertainty in the market. But crude oil production in Russia may not decline as much as previously thought,” said Claudio Galimberti, senior vice president of Rystad Energy.

“Warnings from major US banks about a possible recession next year are still weighing on the market. Net long hedge fund positions are now at a six-year low,” said Dennis Kissler, senior vice president of trading at BOK Financial.

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