Oil prices drop amidst uncertainties in China

30 Dec 2022 , 10:11 AM

Oil prices fell for the second consecutive day on Thursday due to an uncertain demand outlook, as more countries considered restrictions on Chinese travellers, as COVID-19 infections spread in the world’s top oil-importing country.

Brent crude futures for February delivery fell a dollar to $82.26, a 1.2% decline. West Texas Intermediate crude futures in the United States settled at $78.40 per barrel, down 56 cents, or 0.7%.

China’s government is lifting pandemic restrictions, but a surge in infections has prompted some countries to impose stricter travel restrictions on Chinese visitors.

Britain is debating whether to impose restrictions on Chinese visitors. Arrivals from the country have already been subjected to testing in the United States, Japan, India, and Taiwan.

Despite the unexpected increase in crude oil stocks, the report was ‘positive’ and reflected a ‘solid rebound’ in implied oil demand, resulting in significant draws of refined products, according to Giovanni Staunovo of Swiss bank UBS.

Both oil contracts witnessed a downside of more than 2% early Thursday, but recovered as the US dollar fell, putting investors on edge about interest rate hikes.

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