Oil prices fall due to reduced demand in China and warm weather
28 January 10:14
Oil prices rose slightly, but remain close to a two-week low as of Tuesday. The main factors affecting the market are China’s weak economic performance and forecasts of warming in different regions, which negatively affects the demand outlook, Komersant ukrainskyi reports with reference to Reuters.
As for specific prices: Brent crude oil futures rose by 60 cents (0.78%) to $77.68 per barrel. U.S. WTI crude rose 50 cents (0.68%) to $73.67. It is worth noting that on Monday, Brent reached its lowest level since January 9, and WTI – since January 2.
China, the world’s largest oil importer, recorded an unexpected decline in manufacturing activity in January. This raises additional concerns about the outlook for global oil demand.
The situation for China is complicated by new US sanctions on Russian oil trade. FGE analysts predict that refineries in Shandong Province could lose up to 1 million barrels of oil per day due to the ban imposed by the Shandong Port Group on tankers subject to US sanctions. Finding alternative sources of oil supply is proving to be much more expensive.
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India, the world’s third largest oil importer, is also experiencing problems with Russian oil supplies. However, local refineries are taking advantage of the transitional period of sanctions to make purchases until March.
The US is forecast to experience warmer-than-normal weather this week, which will reduce demand for heating fuel after a previous surge due to extreme cold.
Additional pressure on financial markets is created by increased interest in a new low-cost artificial intelligence model from the Chinese company DeepSeek.
Experts expect further caution in the market as the February 1 deadline for US tariffs approaches. Any potential trade restrictions could negatively affect global economic growth and, accordingly, put pressure on oil prices.