Singapore September 7 2022: Oil prices fell on Wednesday as COVID-19 curbs in top crude importer China and expectations of further interest rate hikes fanned concerns of a global economic recession and lower fuel demand growth.
Brent crude futures fell $1.12, or 1.2%, to $91.71 a barrel at 0113 GMT after slipping 3% in the previous session. U.S. West Texas Intermediate crude futures declined by $1.25, or 1.4%, to $85.63 a barrel.
Oil pared strong gains made on Monday after the Organization of the Petroleum Exporting Countries (OPEC) and their allies, a group known as OPEC+, decided to cut output by 100,000 barrels per day in October.
“Fading the OPEC+ production cut bounce wasn’t that hard to do given a laundry list of global economic challenges,” said Edward Moya, a senior market analyst at OANDA, in a note.
“Despite some better-than-expected U.S. services data, global growth isn’t looking good at all and that is trouble for crude prices.”
China’s stringent zero-COVID policy has kept cities such as Chengdu, with 21.2 million people, under lockdown, curbing people movement and oil demand at the world’s second-largest consumer.
“More infectious strains of the virus are raising concerns that authorities will be forced to more frequently lockdown areas as China persists with a zero-COVID strategy,” said ANZ Research analysts in a note.
