Oil prices inch lower as China COVID, recession worries outweigh tight supply

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Oil prices inched lower after seesawing through early trading on Tuesday, as worries that fuel demand would be hit by a possible recession and fresh COVID-19 curbs in China outweighed tight global supplies.

U.S. West Texas Intermediate (WTI) crude fell 22 cents, or 0.2% to $120.71 a barrel at 0353 GMT, while Brent crude futures eased 25 cents, or 0.2%, to $122.02 a barrel.

“Discussion within the oil complex still revolves around Libya’s decline in production, China continuing to impose measures to slow the spread of COVID, and concerns around global recession woes driving demand destruction,” said Stephen Innes, managing partner at SPI Asset Management.

In China, a COVID outbreak at a bar in Beijing has raised fears of a new phase of lockdowns just as restrictions were being eased and fuel demand was expected to firm.

The Chinese capital’s most populous district, Chaoyang, kicked off a three-day mass testing campaign among its roughly 3.5 million residents on Monday. About 10,000 close contacts of the bar’s patrons have been identified, and their residential buildings put under lockdown.]

via Reuters

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