That is why the price of oil is now falling shortly before Easter

The corona situation in China has eased in some areas, but the government is still sticking to the zero-Covid strategy. Increasing supply on the market is also pushing down oil prices.

Oil prices eased Thursday after two straight days of gains. In the morning, a barrel (159 liters) of North Sea Brent cost US$ 108.05. That was 73 cents less than on Wednesday. The price of a barrel of West Texas Intermediate (WTI) fell $1.13 to $103.12.

Most recently, the prospect of rising demand for crude oil had driven prices after the otherwise strict corona measures in the Chinese financial metropolis Shanghai had been relaxed.

In some residential areas, people are allowed to leave their homes again, but must comply with distance rules. Other residential areas remain in strict lockdown.

Xi defends tough course

Despite the associated economic damage, Chinese President Xi Jinping is sticking to the strict zero-Covid course. “We must continue to put people above everything, life above everything,” Xi said Thursday, according to state media. “The current global pandemic is still very serious, we must not slack off in prevention and control work. Persistence brings victory.”

As the second largest economy in the world, China is one of the most important oil consumers. In addition, the country’s central bank is likely to take further measures to support the flagging economy.

Release of oil reserves increase supply

However, there are currently arguments in favor of an increasing oil supply, which is likely to cause oil prices to fall. US inventories of crude oil have risen surprisingly significantly in the past week, as was announced on Wednesday.

In addition, the member states of the International Energy Agency have released national oil reserves in order to mitigate the economic consequences of the Ukraine war. The International Energy Agency is therefore lowering its forecast for the price of Brent oil, like the OPEC countries before it.

The IEA had previously assumed that there would be a shortage this year. But even in the second half of the year, the market is likely to remain balanced, it is now said. According to Commerzbank experts, the released oil reserves in the USA should make up for the forecast shortfall in oil production in the second half of the year.