China Growth Concerns Weigh On Oil Prices

Oil prices are weaker again today with WTI down 1.4% to around $84.40 and Brent -1.1% to $91.80/bbl respectively, as the demand outlook became the focus once more and risk appetite deteriorated with most equity markets in the region down.

• Concerns regarding crude demand from China came to the forefront, as Covid cases continue to rise reducing the hope of any further near-term easing of restrictions.
• The spread between the two nearest Brent contracts continues to be in backwardation pointing to a tight market, but it has eased since the start of the month. (Bloomberg)
• Overnight the US EIA reported that there had been a drawdown in crude inventories of 5.4mn barrels, more than last week’s 3.9mn build and the largest weekly drop since August.
• Later numerous central bank officials speak including the Fed’s Bullard, Bowman, Mester, Jefferson and Kashkari. Any comments that move the USD are also likely to move oil prices.