International Oil Prices Fall Below $100... Dropping Over 20% in Just One Week

[Asia Economy New York=Special Correspondent Joselgina] International oil prices, which had soared due to Russia's invasion of Ukraine, fell below $100 per barrel. This was a result of growing concerns that demand could decrease due to the spread of COVID-19 in China.

On the 15th (local time) at the New York Mercantile Exchange (NYMEX), April delivery West Texas Intermediate (WTI) crude oil closed at $96.44 per barrel, down 6.4% ($6.57) from the previous session. This is the first time since February 28 ($95.72) that the WTI price has fallen below $100 per barrel at closing.

Earlier, WTI had surpassed $123 per barrel on the 8th amid growing fears over sanctions on Russian crude oil, marking the highest closing price since August 2008. However, it has since dropped more than 20% in just one week.

On the same day, May Brent crude on the London ICE Futures Exchange also recorded $99.91 per barrel. This is the first time in three weeks that Brent crude closed below $100 per barrel.

This downward trend is interpreted as being due to the resumption of peace talks between Russia and Ukraine, along with lockdown measures in China to curb the spread of COVID-19, which have heightened concerns over reduced demand. Matt Smith, Chief Oil Market Analyst at Kpler, stated, "The oil market is being hit by concerns over the uncertainty of additional lockdowns in China and their impact on energy demand due to widespread lockdown measures."

As the possibility of a surge in oil prices due to the Ukraine situation was raised recently, there have been ongoing speculations that the U.S. government might lift sanctions on oil exports to Venezuela. The previous day, it was also reported that Chevron had begun preparations to resume its oil business in Venezuela.

Additionally, expectations that the U.S. Federal Reserve (Fed) would raise interest rates at the Federal Open Market Committee (FOMC) regular meeting held over two days starting this day also exerted downward pressure on oil prices.

Gold prices, a representative safe-haven asset, also showed a downward trend. On the same day at the New York Mercantile Exchange, April delivery gold closed at $1,929.70 per ounce, down 1.6% ($31.10).