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Oil prices fall amid protests in China

Oil prices fell on Monday amid a general decline in investor appetite for risk in connection with information about mass protests taking place in China against covid restrictions and the ruling party.

The cost of January futures for Brent oil on the London ICE Futures exchange by 8:10 Moscow time on Monday is $81.31 per barrel, which is $2.32 (2.77%) lower than the closing price of the previous session. As a result of trading on Friday, these contracts fell by $1.71 (2%) to $83.63 per barrel.

The price of futures for WTI oil for January in electronic trading on the New York Mercantile Exchange (NYMEX) fell by this time by $2.31 (3.03%), to $73.97 per barrel. By the close of previous trading, the value of these contracts decreased by $1.66 (2.1%) to $76.28 per barrel.

As a result of last week, Brent fell by 4.6%, WTI – by 4.8%.

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According to Bloomberg, protests took place in cities across the country, including the capital Beijing, as well as Shanghai, Xinjiang and Wuhan, which was originally the epicenter of the spread of COVID-19.

This contributes to the strengthening of the US dollar, which reduces the attractiveness of investments in raw materials, and also increases the likelihood of even more significant tightening of restrictions by the Chinese authorities, the agency said.

“The outlook for the oil market remains weak and developments this weekend in China do not add to the positive,” said Warren Patterson, who is in charge of commodities strategy at ING Groep NV in Singapore.

Oil demand in China will decline to 15.11 million barrels per day (b/d) in the fourth quarter, compared with 15.82 million b/d a year earlier, according to forecasts by analyst firm Kpler.

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