Crude Prices Slip on Chinese Lockdown Concerns
May 10, 2022
Crude oil prices closed down hard in yesterday’s trading as demand concerns from China’s on COVID-19 lockdowns pressured prices lower. The U.S. dollar reaching a 20-year high and U.S. equities falling also helped yesterday’s selloff. The market also had selling pressure from Saudi Arabia lowering their crude oil prices to Asian and Europe for June along with Russia’s Deputy Prime Minister saying that in early May oil output rose from April and their production has stabilize.
An EU sources said the European Commission is considering offering landlocked eastern European Union states more money to upgrade oil infrastructure in a bid to convince them to agree to an embargo on Russian oil.
Yesterday’s selloff marked the largest one-day percentage drop since March 31.
The Fed raising rates is also a head wind for energy prices as it could impact demand, and this is also currently helping the sell off as bearish news whittles away at the risk premium that has gone into the market for the last couple of years. Despite the recent selling there are still plenty of bullish issues that support this market which should keep it trading in a range for the medium term.
Reuters reported that the average cost of a retail gallon of gasoline hit $4.374, according to the American Automobile Association, surpassing the former record of $4.331.