Kong (AFP) – Tuesday, WTI oil lost more than 5% of its value because investors were worried about China’s economy slowing down. The price of WTI oil dropped below $100 per barrel.
The contract fell 5.7% to $97.13, while Brent fell 6% to $100.54.
The dramatic drops came less than a week after they both surged to near 14-year highs because Vladimir Putin’s conflict in Ukraine made people worried about supplies. The US and the UK have now banned petroleum imports from Russia, the world’s third-largest producer.
China stated Sunday that it would close Shenzhen’s technology center, a metropolis of 17 million people and one of the nation’s largest, because of the rapidly spreading Omicron virus. Infections have risen throughout the country.
With China being the world’s largest oil importer, the move shattered demand expectations, while a glimmer of hope about Russia-Ukraine peace negotiations also weighed on the market.
Australia & New Zealand Banking Group’s Daniel Hynes said that “headlines” are still influencing commodity market sentiment, and the talks between Russia and Ukraine are making people think there won’t be a lot of supply interruptions.
“This should result in increased pressure on oil prices.” It does not, however, represent the underlying reality, which is that Russian oil is growing more isolated. “