[Asia Economy New York=Special Correspondent Joselgina] International oil prices slipped below $80 per barrel. This was due to increased concerns that demand would weaken amid the spread of COVID-19 in China. Reports that oil-producing countries, including Saudi Arabia, are considering increasing production also acted as downward pressure.
On the 21st (local time) at the New York Mercantile Exchange, the December West Texas Intermediate (WTI) price closed at $79.73 per barrel, down 35 cents (0.44%) from the previous session. The January contract, which becomes the front-month contract the following day, closed at $80.04 per barrel, down 7 cents (0.1%).
WTI fell for the fourth consecutive trading day. It was the first time since September 30 that the price dropped below $80 per barrel. During the session, WTI even slid more than 3.5% to the $77 per barrel range.
This was due to the rapid increase in COVID-19 cases in China. The number of new infections in China exceeded 20,000 for four consecutive days since the 16th. Beijing also confirmed COVID-19 deaths for the first time in about six months. Lockdown orders were issued in some regions.
Goldman Sachs lowered its Brent crude oil forecast for the fifth quarter of this year from $110 to $100. Goldman Sachs explained that the downward revision was due to China's COVID-19 lockdowns and uncertainties surrounding the planned price cap on Russian crude oil by the Group of Seven (G7) countries.
There were also reports that oil-producing countries are discussing increasing production. On the same day, The Wall Street Journal (WSJ), citing sources, reported that at the OPEC Plus meeting scheduled for December 4, which includes OPEC and non-OPEC oil-producing countries, a plan to increase production by up to 500,000 barrels per day is being discussed.
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