World oil price fell sharply, below 100 USD/barrel
Investors hope there will be progress in negotiations to resolve the Russia-Ukraine conflict, helping to boost global oil supplies.
In addition, on March 15, Russia also proposed to allow the restoration of the Iran nuclear deal in the near future. Restoring the nuclear deal could help Iran get sanctions relief on its oil sector and resume crude exports.
In the wake of the Russia-Ukraine conflict, the Organization of the Petroleum Exporting Countries said that oil demand in 2022 faces challenges and inflation increases as crude oil prices soar.
China’s reported spike in daily COVID-19 cases also raises concerns that the country’s current rate of consumption will slow. “It is estimated that a major shutdown in China could put 0.5 million bpd of oil consumption at risk,” said Louise Dickson, senior oil market analyst at Rystad Energy.
Meanwhile, the US Federal Reserve is expected to raise interest rates by 25 basis points on March 16, the first time in four years, to combat inflation. This could strengthen the dollar and reduce demand for oil and other commodities denominated in the dollar.