Oil falls more than 2% on fears of a global recession and an increase in Corona cases in China

Oil prices fell more than 2% on Tuesday, extending losses of about 2% also in the previous session, as fears of a global recession and an increase in Corona virus infections in China exacerbated concerns about slowing global demand.

World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva warned on Monday of the rising risks of a global recession and said inflation remained an ongoing problem.

By 1006 GMT, Brent crude fell $2.30, or 2.4 percent, to $93.89 a barrel.

The price of US West Texas Intermediate crude fell $2.12, or 2.3 percent, to $89.01 a barrel.

Oil prices have fallen sharply on economic concerns after hitting a peak earlier this year when Brent crude approached a record price of $147 a barrel, after Russia’s invasion of Ukraine exacerbated supply concerns.

In addition to these concerns, there is concern that Chinese demand will be dealt another blow. And the authorities have stepped up testing for Corona injuries in Shanghai and other large cities, with the increase in Covid-19 infections again.

Oil also came under additional pressure from the dollar’s rise, which hit its highest levels in years amid concerns about continued interest rate hikes and the escalation of the war in Ukraine.

A strong dollar reduces demand for oil because it makes it more expensive for buyers who use other currencies.

In order to limit losses, the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a bloc known as OPEC+, decided last week to cut production target by two million barrels per day.