LONDON (Reuters) – Oil prices fell on Tuesday amid fears of slumping fuel demand and a worsening outbreak of the COVID-19 coronavirus in China, the biggest importer of crude.
Brent crude was down 84 cents, or 0.9 percent, at $97.08 a barrel by 1006 GMT, while US West Texas Intermediate crude was down 96 cents, or 1 percent, at $90.83.
Both benchmarks reached their highest levels since August on Monday amid reports that leaders in China were considering an exit from the country’s strict COVID-19 restrictions.
Today, Tuesday, official data showed an increase in cases of the new Corona virus in Guangzhou and other Chinese cities.
CMC Markets analyst Tina Ting said market participants will also look forward to Friday’s US CPI data.
“Against the backdrop of steady inflation and rising interest rates in major Western countries, oil futures contracts are still bearing in mind the possibility of a global economic recession,” Teng said.
On the supply side, bullish signals remain in the near term.
An EU embargo imposed on Russian oil in response to Russia’s invasion of Ukraine is due to start on Dec. 5 and will be followed by a halt to imports of petroleum products in February. Moscow describes its actions in Ukraine as a “special operation”.
A preliminary Reuters poll showed on Monday that US crude oil inventories are expected to have risen by about 1.1 million barrels last week.
The survey was conducted ahead of reports from the American Petroleum Institute at 4:30 p.m. ET (2130 GMT) on Tuesday and from the Energy Information Administration at 10:30 a.m. (1530 GMT) on Wednesday.
(Additional coverage by Shadia Nasrallah). Editing by Isabel Coa by David Goodman
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