• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 days The United States produced more crude oil than any nation, at any time.
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 20 hours Bad news for e-cars keeps coming
  • 3 days China deletes leaked stats showing plunging birth rate for 2023
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.

Oil Prices Plunge Below $80 As Near-Term Demand Worries Grow

Oil prices crashed early on Wednesday, with Brent Crude falling below the $80 a barrel mark again, as concerns about immediate global oil demand intensified with soaring Covid cases in China and slowing economies globally.

As of 8:33 a.m. ET on Wednesday, the U.S. benchmark, WTI Crude, had plummeted below $75 per barrel and traded down by 2.68% at $74.91. The international benchmark, Brent Crude, dipped below $80 and the front-month contract was down by 2.70% at $79.92.

Oil prices continued on Wednesday the Tuesday rout when both benchmarks dipped by 4% and Brent plummeted the most in one day in more than three months. The recent sell-off in oil was the result of gloomy economic expectations from the International Monetary Fund (IMF) regarding the state of the Chinese and global economy in the early weeks of 2023, and a strong U.S. dollar.  

Surging Covid cases in China and a slowdown in the Chinese economy are expected to weigh on oil demand and prices in the immediate term.

The Chinese economy is off to a difficult start to 2023, Kristalina Georgieva, managing director of the International Monetary Fund (IMF), told the CBS program Face the Nation in an interview aired on Sunday. China’s re-opening and the surge in infections that followed is “bad news” for the global economy in the short term, Georgieva said.

The market is currently focused on a short-term deterioration in demand as China struggles with Covid-19, milder weather reduces demand for heating fuels, and the IMF’s latest warning that one-third of the world may suffer a recession in 2023, Saxo Bank said on Wednesday.

“In Brent, the uptrend from early December looks challenged with a break below $81 signalling further loss of momentum, initially towards $79.65,” the bank’s strategists said.

The most imminent catalyst for the direction of oil prices will come later on Wednesday when the American Petroleum Institute (API) will report its estimates of U.S. commercial oil inventories.


By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • George Doolittle on January 05 2023 said:
    Over-investment in chemical feedstocks creating a massive glut in US made industrial product at the moment. Might see a huge drop in the price of paper and ink would be a heads up as to sudden really low price for near everything in USA as far as physical goods be upon said economy.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News