Crude oil closes slightly in the red – Uncertainty about China’s Covid plans

Crude oil futures closed lower in volatile trading on Monday (Nov. 7). Investors are concerned about the uncertainty of the opening of China, the world’s largest importer of crude oil.

  • WTI crude futures were down 82 cents, or 0.9%, at $91.79 a barrel.
  • BRENT crude futures were down 65 cents, or 0.7%, at $97.92 a barrel.

The Chinese authorities are considering opening up the country after taking strict measures to control COVID-19 for a long time. However, the opening process is slow and there is no clear time frame.

The National Health Commission’s (NHC) Office of Disease Prevention and Control said Saturday (Nov. 5) that China must continue to adhere to its zero-tolerance policy in light of the COVID-19 outbreak across the country and that implementing this policy has proven most effective.

These remarks are expected to shatter investors’ dreams after it was previously widely expected that China will relax its zero-tolerance COVID policy and that the country will open up in March 2023.

The depreciation of the dollar has supported the intraday market. The weakening of the dollar makes crude oil contracts priced in dollars cheaper and more attractive to investors holding other currencies.

China’s increase in crude oil imports also had a positive impact on the market. Added to this are forecasts that the oil market will be tight when the European Union (EU) imposes sanctions on Russian crude oil on December 5.

China imported 10.16 million barrels of crude oil per day in October, according to the China Customs Service. This is an increase from 9.8 million barrels per day in September.

The Spot Market is Open

Tuesday, November 8, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
11.25

91.47

-0.32

-0.35%

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