Oil Declines on Fresh Covid-19 Lockdown in China
Fresh covid-19 lockdown in the second largest oil consumer economy has sparked market-related fears, causing global prices of crude to slide again amidst the prospect of US-Iran nuclear deal talk.
Recall, that the Organisation of Petroleum Exporting Countries and allies (OPEC+) has made a surprise oil production volume cut, but the impact was insignificant because member countries including Nigeria, Angola and others have not been meeting quotas.
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A slew of energy analysts had projected that the oil group would agree on production raise for September amidst inventories build in the United States. Oil prices fell as concerns over demand weighed on sentiment, with COVID-related lockdowns increasing in China, Australia’s ANZ Bank said in a Wednesday note.
Following Chengdu, the city of Guiyang has also restricted movement amid renewed COVID outbreaks. As more infectious strains emerge, the market is concerned that authorities will impose lockdowns more frequently as China remains adamant about its zero-COVID strategy, the bank noted.
The tone in today’s market is in stark contrast to Tuesday after the Organization of the Petroleum Exporting Countries announced a production cut for October, ANZ Bank said.
The output cut for next month sends a signal that the group does not see the current move as representative of market fundamentals, the bank said. # Oil Declines on Fresh Covid-19 Lockdown in China
