New York West Texas Intermediate (WTI) crude futures closed more than 4% lower on Wednesday (Jan. 4) as investors continued to worry about a global economic slowdown and a surge in The number of COVID-19 cases in China will affect oil demand.
The WTI crude oil contract is delivered in February. It fell $4.09, or 5.3%, to settle at $72.84 a barrel.
The Brent crude oil contract (BRENT) is delivered in March. Plunged $4.26, or 5.2%, to $77.84/barrel.
Bob Jawker, an analyst at Mizuho in New York, said: Oil prices tumbled on concerns about the COVID-19 situation in China and the Federal Reserve’s move to raise interest rates. which is one of the factors causing global economic recession
The World Health Organization (WHO) is still evaluating COVID-19 infections. the latest surge in China It urged Chinese health officials to regularly provide real-time specific information on the country’s COVID-19 situation. This includes sharing additional genetic sequence information. Information about hospital admissions, deaths and vaccinations.
Countries including the United States, the United Kingdom, India, Italy and Japan have issued requirements requiring passengers from China to show PCR results for COVID-19 after China announced the reopening of both arrivals and departures. This has raised concerns that COVID-19 will spread widely as the epidemic situation in China continues to deteriorate.
Oil prices were also pressured by news China announced an increase in oil product export quotas this year. which the market sees as an indication of weak domestic demand. It was also pressured by reports that US manufacturing contracted for the second straight month.
The Institute for Supply Management (ISM) said its U.S. manufacturing index declined to 48.4 in December, down from 49.0 in November. The index is below 50, indicating that the US manufacturing sector is in contraction. It was the second consecutive month of contraction as rising interest rates had dampened market demand.
Investors are keeping an eye on the US Energy Information Administration’s (EIA) crude inventories release today, with analysts expecting US crude inventories to rise by 2.2 million barrels last week.