Oil plunges 4% on China’s COVID-19 restrictions, climate warnings

Oil plunges 4% on China’s COVID-19 restrictions, climate warnings
Oil plunges 4% on China’s COVID-19 restrictions, climate warnings

LONDON: Oil prices fell by four percent on Monday, continuing their sharp losses incurred last week on the back of the rise in the US dollar and fears that the global recovery in fuel demand may slow due to new restrictions to confront the pandemic in Asia, especially in China.

Morale was further hurt by a serious warning from a UN panel of climate changes after she came fires in greece On homes and forests, parts of Europe suffered deadly floods last month.

Brent crude futures fell $2.82, or 4.2 percent, to $67.88 a barrel by 09:30 GMT, after falling 6 percent last week in their biggest loss in four months.

US West Texas Intermediate crude futures fell $2.85, or 4.3 percent, to $65.43 a barrel, after dropping nearly 7 percent last week in the biggest decline in nine months.

“Concerns about a possible decline in global oil demand have resurfaced with the acceleration of infection rates for the Delta strain,” RBC analyst Gordon Ramsay said in a note.

ANZ analysts pointed to new restrictions in China, the world’s second largest consumer of oil, as a major factor that clouds the prospects for demand growth.

The restrictions included flight cancellations, travel warnings issued by 46 cities, and restrictions on public transportation and taxi services in 144 of the worst-hit areas.

China’s export growth slowed more than expected in July following the outbreak of COVID-19 and Seoul, while import growth was also slower than expected.

China’s imports of crude oil fell in July and fell sharply from a record level in June 2020.

The rise of the US dollar to a four-month high against the euro also pressured crude prices, after a stronger-than-expected US jobs report on Friday raised bets that the Federal Reserve may move quickly to tighten monetary policy in the United States.

A higher dollar would increase the cost of oil to holders of other currencies.

(Reuters)

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