London — Oil prices fell by more than $1 a barrel on Tuesday as rising Covid-19 cases in China renewed the fear of lower fuel consumption from the world’s top crude importer.
Brent crude futures fell $1.07, or 1.15%, to $92.07 a barrel by 10.05am GMT after settling 3% lower on Monday.
US West Texas Intermediate crude fell by $1.25, or 1.46%, to $84.62, after tumbling 3.5% in the previous session.
Investors cheered China’s announcements last week that it would lessen the effect of a strict zero-Covid policy to spur economic activity and energy demand, but analysts said lockdowns and surging case numbers continue to be a key downside risk.
“Rising Covid cases in Beijing and in other cities served us with a reminder that a change in the trajectory of economic and oil demand growth in the world’s biggest oil importer is anything but imminent,” said Tamas Varga of oil broker PVM.
The country’s Covid cases rose further on Tuesday, including in the capital Beijing, and the country’s factory output growth slowed.
Investment bank JPMorgan cut its quarterly and full-year forecasts for economic growth in China on Tuesday due to the country’s Covid restrictions.
Meanwhile, oil cartel Opec cut its 2022 global oil demand growth forecast for a fifth time since April, citing mounting economic challenges including high inflation and rising interest rates.
However, concern about tight supplies this winter continued to support oil prices. A EU embargo on Russian oil is set to start on December 5. The ban will be followed by the halting of oil product imports in February.
EU bans on seaborne Russian crude mean 1.1-million barrels a day will need to be replaced, the International Energy Agency said on Tuesday.
In further bullish news, US crude oil stocks are expected to have dropped by about 300,000 barrels in the week to November 11, a Reuters poll showed on Monday.
The poll was conducted ahead of reports from the American Petroleum Institute due at 9.30pm GMT on Tuesday and the Energy Information Administration (EIA) due on Wednesday.