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Crude oil returns to record losses today, with a decline of about 0.8% for both crude oils at approximately 12:30 p.m. GMT, as Brent crude oil reached the level of $82.56 per barrel, and West Texas Intermediate oil reached the level of $77.33 at the same time.
Today’s oil losses came despite a larger-than-expected cut in China’s five-year loan prime rate by 25 basis points in an attempt to support growth and revive the real estate sector.
It seems that the markets are looking for more signs of a recovery in demand in China, despite the expected larger interest rate cut, in addition to the recovery in travel during the New Year holidays.
This also comes in the face of a glut of supply from countries outside the Organization of the Petroleum Exporting Countries (OPEC), as the International Energy Agency noted in its February report, coinciding with weak oil demand growth momentum.
While the biggest support for the oil rises in recent days were concerns about the safety of global oil supplies, as military actions continue to escalate in the Middle East, according to Commerzbank.
Markets are closely monitoring what is happening in the Middle East, with more disruption to navigation in the Red Sea, in addition to anticipating developments in the city of Rafah, with fears of an extension of ground military operations in the city, which is very densely populated and with refugees, before mid-next March.
I believe that launching ground operations in Rafah may move the conflict in the entire Middle East to a whole new, very dangerous and bloody phase on various fronts, which may further implicate the active parties in the region in this conflict.
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