Brent futures fell $1. 20, or 1. 2%, to $97. 37 a barrel.
SINGAPORE: Oil costs fell more than $1 a barrel on Monday after the Chinese government reiterated over the weekend its commitment to a strict COVID containment approach, accelerating hopes for a rebound in oil demand at the world’s smartest crude importer.
Brent futures fell $1. 20, or 1. 2%, to $97. 37 a barrel at 02:27 GMT, after hitting $96. 50 the previous day. West Texas Intermediate crude to $91. 24 a barrel, down $1. 37, or 1. 5%, falling to a low of $90. 40 a barrel in the previous session.
“Oil costs have fallen sharply as Chinese officials pledged to stick to the zero-COVID policy, while cases of infection have risen in China, which may lead to more restrictive measures, clouding demand outlook,” said Tina Teng, analyst at CMC Markets.
A jump in the U. S. The U. S. economy is also affecting oil prices, he added.
On Friday, 4 Federal Reserve policymakers indicated they would still make a smaller interest rate increase at their next policy meeting despite strong employment data.
Brent and WTI rose last week, up 2. 9% and 5. 4%, respectively, as rumors of an imaginable end to strict COVID-19 lockdowns pushed up Chinese inventory markets and raw material costs despite the absence of announced changes.
However, at a press conference on Saturday, fitness officials said they would persevere with their “dynamic cleansing” of COVID cases as soon as they appear.
Trade data from the world’s second-largest economy later on Monday may show a further slowdown in exports as global demand continues to slow.
“The market still faces symptoms of weak oil demand due to already high costs and weak economic backdrop in evolved markets,” ANZ analysts said in a note, adding that demand in Europe and the U. S. The U. S. economy had returned to 2019 levels.
“We now expect global demand in the fourth quarter of 2022 to grow just 0. 6 mb/d (million barrels consistent with the day) to the same quarter last year and moderate next year. “
Oil costs are supported by expectations of a tightening as the European Union’s embargo on Russian crude oil exports across the sea begins on Dec. 5, as refiners around the world ramp up production to meet strong demand for diesel.
U. S. Petroleum Refiners
This quarter its plants will operate at a breakneck pace, near or above 90% of capacity, while China’s largest private refinery, Zhejiang Petroleum and Chemical Co (ZPC), is ramping up diesel production.
Kuwait Integrated Petroleum Industries Co (KIPIC) said on Sunday that the first phase of the Al-Zour refinery had advertising operations, according to state news firm (KUNA). (Reporting by Florence Tan; Editing via Lincoln Feast and Kenneth Maxwell)
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