15/11/2022–|Last Updated: 11/15/202212.56pm (Makkah Al-Mukarramah)
Oil prices fell on Tuesday after a surge in COVID-19 cases in China raised fears about a decline in fuel consumption at the world’s largest importer of crude, as well as a downgrade by the Organization of Exporting Countries of Oil (OPEC) of its forecast for global demand in 2022.
Brent crude futures fell 0.3% to $92.87 a barrel by 04:16 UTC, after dropping 3% by Monday’s close.
US West Texas Intermediate crude futures fell 0.6% to $85.37 a barrel, after falling 3.5% in the previous session.
And while investors welcomed China’s announcement last week that it would ease tight restrictions imposed to curb the spread of the Corona virus to stimulate economic activity and energy demand, analysts said the shutdowns and rising Covid-19 infections still pose a major downside risk.
China’s industrial production growth slowed and retail and property sales fell further in October, the latest sign that the world’s second-largest economy is losing momentum as it grapples with prolonged Covid-related restrictions.
OPEC cut its forecast for global oil demand growth in 2022 for the fifth time since April, citing mounting economic challenges, including rising inflation and interest rates.
This comes after the International Monetary Fund said on Sunday that the global economic outlook turned bleaker than expected last month, pointing to a steady deterioration in PMI surveys in recent months.
The European Union’s embargo on Russian oil, in response to Moscow’s war on Ukraine, is due to begin on December 5th.
After the ban, the European Union will stop imports of Russian petroleum products in February.
