Oil prices fall further as China extends COVID curbs

A view reveals the crude oil terminal Kozmino on the shore of Nakhodka Bay close to the port metropolis of Nakhodka, Russia August 12, 2022. REUTERS/Tatiana Meel

LONDON, Sept 8 (Reuters) – Oil costs fell on Thursday, extending sharp losses from the earlier session, as China’s extension of lockdown measures to curb the COVID-19 unfold exacerbated considerations {that a} slowdown in financial exercise globally would hit gasoline demand.

Brent crude futures misplaced 40 cents, or 0.4%, to $87.60 per barrel by 1002 GMT, close to a late-January low. U.S. crude futures had been down 41 cents, or 0.5%, at $81.53 a barrel, close to a mid-January low.

Saxo Financial institution analyst Ole Hansen stated the decline was “pushed by continued demand worries associated to the chance of growth-killing fee hikes from central banks battling runaway inflation and China’s continued financial battle brought on by its COVID-zero coverage”.

China’s Chengdu prolonged a lockdown for a majority of its greater than 21 million residents on Thursday to stop additional transmission of COVID-19 whereas tens of millions extra in different elements the nation had been instructed to shun journey in upcoming holidays. learn extra

In the meantime various central banks around the globe are anticipated to start a brand new spherical of rate of interest hikes to combat inflation.

The European Central Financial institution is predicted to lift rates of interest sharply when it meets afterward Thursday. A U.S. Federal Reserve assembly follows on Sept. 21.

Costs drew some assist, nonetheless, from Russian President Vladimir Putin’s risk to halt the nation’s oil and fuel exports if worth caps are imposed by European consumers. learn extra

The European Union proposed capping Russian fuel costs solely hours later, elevating the chance of rationing in among the world’s richest nations this winter if Moscow carries out its risk. Russia’s Gazprom (GAZP.MM) has already halted flows from the Nord Stream 1 pipeline, slicing off a considerable share of provide to Europe.

Elsewhere, reacting to hovering power costs, Britain’s new Prime Minister Liz Truss will on Thursday scrap the nation’s fracking ban and can search to make extra use of its reserves within the North Sea, the Telegraph newspaper reported earlier. learn extra

JP Morgan stated OPEC+ might have to chop manufacturing by 1 million barrels per day to “stem the downward momentum in costs and realign bodily and paper markets which seem disconnected.”

The Group of the Petroleum Exporting Nations and allies led by Russia, collectively often known as OPEC+, agreed on Monday to chop their output by 100,000 bpd for October.

Further reporting by Muyu Xu in Singapore;Modifying by Elaine Hardcastle

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