Oil slips over demand woes as China struggles with Covid protests

Oil prices lost almost US$2 a barrel on Monday as ongoing China COVID restrictions and protests in several cities fuelled demand concerns in the top oil importing country, reported Anadolu.

International benchmark Brent crude traded at US$81.33 per barrel at 0720 GMT, down 2.84 per cent from the closing price of US$83.71 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at US$74.22 per barrel at the same time, a 2.7 per cent loss after the previous session closed at US$76.28 a barrel.

Prices began the week on a bearish note, fuelled by ongoing COVID restrictions in China and concerns about weak demand in the world’s largest oil importing country.

Local media reported protests in several cities late on Saturday against China’s strict coronavirus pandemic policy.

In early Asian trade, Brent fell to its lowest level since Jan 12 at US$81.11, while WTI dropped to an 11-month low of US$73.84.

Uncertainties in the oil markets are reflected on the oil price forecasts, with Morgan Stanley, a US-based international investment and banking firm, raising its oil price forecast last week for 2023 from US$100 to US$105. The main factors cited were additional Russian supply impacts beginning in May and fading prospects for the Iran deal.

Investors are now anticipating the OPEC+ meeting on Dec 4, when producers are expected to decide on production for January, and the EU ban on Russian oil exports on Dec 5.

Although the EU failed to reach a deal to cap prices for Russian seaborne oil, the bloc is set to ban Russian oil starting from Dec 5 and oil products on Feb 5.

The G-7 countries are also planning to impose a cap of US$65–US$70 a barrel on Russian seaborne oil. —BERNAMA