Oil prices fell more than 2% Monday morning in Asia after Chinese officials reiterated their commitment to stricter COVID containment guidelines over the weekend.
- Brent crude futures fell $1.58, or 1.6%, to $96.99 a barrel.
- WTI crude futures were at $90.84 a barrel, down $1.77, or 1.9%.
According to analysts at CMC Markets, oil prices have fallen sharply as Chinese authorities have pledged to comply with the COVID-19 control policy. The number of infections is increasing in China, which will lead to further restrictive measures, and in turn disguise the development of demand.
Brent and WTI rose 2.9% and 5.4%, respectively, last week on rumors of an end to China’s stringent COVID-19 measures. As a result, the Chinese stock market and commodity prices rose, although no changes have been announced yet.
Monday’s trade data from the world’s second-largest economy may show exports cooling as global demand continues to weaken.
ANZ analysts said the market continues to face signs of weak oil demand due to already high prices and a weak economic backdrop in developed markets. Demand in Europe and the United States has also fallen to 2019 levels.
Global demand is expected to increase by only 0.6 million barrels per day in the fourth quarter of 2022 compared to the same quarter last year and to decline next year.
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Monday, November 7, 2022