18 May 2022


Oil prices sink amid demand worries

NEW YORK, Feb. 24 (Xinhua) — Oil prices fell sharply on Monday as traders were worried about a global economic slowdown, which would potentially hit crude demand.

The West Texas Intermediate for April delivery settled 1.95 dollars lower at 51.43 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for April delivery dropped 2.20 dollars to close at 56.30 dollars a barrel on the London ICE Futures Exchange.

“The rapid shift in sentiment can be explained by concerns about demand,” Carsten Fritsch, energy analyst at Commerzbank Research, said in a note on Monday.

“Weaker oil demand would make the existing oversupply on the oil market even bigger,” Fritsch added.

Market participants are hoping that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, would announce greater production cuts to mitigate possible virus-related decline in demand, according to experts.

In December, the OPEC+ group agreed to deepen production cuts by an additional 500,000 barrels a day, bringing the total cuts to 1.7 million barrels daily.

The OPEC, Russia and other producers have been largely limiting oil output in recent years in order to boost prices.