Crude oil prices plunged more than 2 percent overnight amidst widespread protests in China against the restrictive covid curbs. Both Brent and WTI at one point traded more than 3 percent lower on overnight basis.
The rare street protests and the surging caseloads triggered fears over the fate of oil demand from China.
West Texas Intermediate Crude Oil Futures for January settlement plunged to as low as $73.61 before recovering to its current level of $74.46, implying an overnight decline of 2.4 percent. The benchmark which was at $76.28 at previous close had touched a high of $76.35 in the day’s trade.
Brent Oil Futures for February settlement which had previously closed at $83.71 dropped to as low as $80.83, before recovering to its current level of $81.61, registering a decline of 2.5 percent. The day’s high was $83.13.
The Dollar Index, which measures the Dollar against a basket of six currencies dropped 0.32 percent to trade at 105.62. The Dollar’s weakness was not strong enough to lift the crude oil prices which remained overwhelmed by the China Covid situation.
On the horizon are the OPEC+ meeting, as well as the price cap proposed by G7 and the E.U. ban on Russian crude oil.