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US Vice President Vance: If Iran is allowed to control shipping through the Strait of Hormuz, global energy supplies will be constrained, and gasoline prices will rise. We will see gasoline prices fall after this conflict ends. The US military is ensuring the smooth passage of oil through the Strait of Hormuz.On October 18, the Saudi-led coalition stated that an AH-6I helicopter crashed in the Najran region of Saudi Arabia due to a "technical malfunction," killing both crew members. The Houthi rebels in Yemen had previously issued a statement on the evening of October 17 claiming to have shot down a Saudi Apache helicopter in the Najran region.The Saudi-led coalition said an AH-6I helicopter crashed in the Najran region due to a technical malfunction, killing both crew members.On October 18th, Canadian Defense Minister John McGuinty confirmed on the evening of October 17th that a serious accident occurred at the Canadian Armed Forces Wainwright Air Base in Alberta, resulting in casualties. According to a senior military journalist in Canadian media, based on his 20 years of direct military reporting experience, "such a major accident has never occurred before" during training exercises. Reports indicate that a live-fire exercise was underway at the base when the incident occurred, causing a fire that spread with the wind to an area storing large quantities of ammunition. Canadian Prime Minister Mark Carney stated that evening that a "serious accident" had occurred at Wainwright Air Base, resulting in a large fire. A Member of Parliament representing an Alberta riding also stated that, to his knowledge, an explosion and fire occurred at the base, causing serious casualties.On October 18th, Venezuelan media reported on the 17th that Venezuela, in a joint operation with the French Navy, seized nearly 3 tons of drugs and arrested four people in the Caribbean Sea. The report cited a government statement released by the Venezuelan Ministry of the Interior, Justice and Peace on the evening of the 16th, stating that a special anti-drug team under the Venezuelan National Guard, sharing intelligence with the French Navy, seized approximately 2,900 kilograms of drugs in a drug raid in the Caribbean. The statement indicated that the seized drugs comprised 166 packages, including 1,173.5 kilograms of cocaine and 1,727.4 kilograms of marijuana, totaling 2,900.9 kilograms. The four arrested individuals have been transferred to the Venezuelan prosecutors office.

China COVID-Induced Oil Price Decline May Drive the Price of a Barrel Below $85

Aria Thomas

Sep 02, 2022 11:06

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The picture for oil bulls is unfavorable, and things could worsen before they improve.


New COVID-related lockdowns in China have prolonged the oil selloff for a third day in a row, boosting the likelihood that U.S. crude will go below $85 per barrel for the first time since late January.


Brent crude, the global benchmark for oil traded in London, closed at $92.36 a barrel, down $3.28, or 3.4%, from its session low of $93. Brent prices fell 2.8% on Wednesday and 5% on Tuesday, respectively.


West Texas Intermediate, the standard for U.S. crude traded in New York, finished at $86.61, down $2.94, or 3.3%. Tuesday's decline was 5.5%, while Wednesday's decline was 2.3%.


Thursday's WTI session low was $86, just $1 away from breaching the $85 support.


"From a technical perspective, a break below $85 might drive WTI to test the monthly $82 Middle Bollinger Band," said Sunil Kumar Dixit, chief technical strategist at SKCharts.com. In the case of a fall, the price might reach $77.98 before resuming its climb to the $97-$99 resistance zone.


Again, this is a technical point of view. Obviously, from a broader view on oil, the fundamentals must also be considered," noted Dixit.


Even prior to the China COVID scandal, the fundamentals were at best unclear.


Wednesday, when traders anticipated the oil producing coalition to announce production cuts, OPEC+ gave a more positive demand outlook.


OPEC+ reduced its oil surplus prediction for 2022 to 400,000 barrels per day and predicted a shortage of 300,000 barrels per day for 2023.


The monthly meeting of the 23-nation OPEC+, comprised of the original 13 members of the Saudi-led Organization of Petroleum Exporting Countries and its 10 Russia-led allies, will be held on September 5. If it does not announce any reductions at that time, oil prices may continue to decrease due to fears of weak seasonal demand beginning on September 22.


The White House said on Thursday that Vice President Joe Biden met with Israeli Prime Minister Yair Lapid on Wednesday regarding the revival of a 2015 nuclear agreement that is fervently desired by Iran but fiercely opposed by Israel. This knowledge contributed to Thursday's rise in oil prices. The prospective easing of U.S. sanctions on Iranian oil, which may enhance crude exports by up to one million barrels per day, is at stake.


As reported by Reuters on Thursday, Asia's factory activity dropped in August as China's zero-COVID regulations and cost limits continued to damage businesses, dimming the outlook for the region's weak recovery.


Baoan, the most populous district of Shenzhen, suspended large-scale events and indoor entertainment for three days as the number of COVID-19 cases continued to rise.

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