Oil prices dip as worries mount on weakened demand

Rising Covid cases in China and fear of recession weighs down oil prices further.

AF MARKETWIRE, TRANSLATED BY SIMON ØST VEJBÆK

Wednesday morning, oil edges lower due to concerns over weak demand and surging Covid-19 cases in China.

European reference oil Brent trades at USD 81.70 a barrel Wednesday morning CET against USD 84.60 Tuesday afternoon. US benchmark West Texas Intermediate (WTI) crude futures also fell to trade at USD 73.42 versus USD 79.01 on Tuesday afternoon.

”Warning signs of global recession, China’s lacklustre recovery with surging COVID-19 cases, renewed strength in the U.S. dollar and dampened risk sentiment are all catalysts keeping oil prices in check overnight,” says Yeap Jun Rong, Market Analyst at IG, according to Reuters.

The Chinese government has raised first batch of 2023 export quotas for refined oil products. According to Reuters, such measures signal expectations of slow domestic demand.

Saudi Arabia might cut prices further for flagship product Arab Light to Asian customers in February as concerns of oversupply rise.

The International Monetary Fund (IMF) warns of a tough year for global economy in 2023 as growth propellers USA, Europe and China are all experiencing weakened activity.

US Crude stockpiles rose with 2.2 million barrels last week, with distillate inventories reduced in volume, a preliminary Reuters poll shows. Official figures will be released on Thursday afternoon.

Oil prices fluctuate softly after long New Year’s weekend

Tough macroeconomy seen impacting oil prices in 2023

Oil slides lower as rising virus numbers in China douse forecast demand

Oil trader sees Chinese reopening stoking fuel demand

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