Oil falls due to Covid restrictions and weak factory activity data in China

Oil prices fell on Monday after weaker-than-expected factory activity data from China and on concerns that the expansion of COVID-19 restrictions could curb demand.

Brent crude futures fell 63 cents, or 0.7 percent, to $95.14 a barrel by 0420 GMT, after falling 1.2 percent on Friday.

US West Texas Intermediate crude price fell 47 cents, or 0.5 percent, to $ 87.43 a barrel, after falling 1.3 percent at the close on Friday.

An official survey on Monday showed factory activity in China, the world’s largest importer of crude, unexpectedly fell in October, affected by plunging global demand and severe restrictions on the Corona virus that hit production.

Stephen Innes of SBI Asset Management said that the expansion of Covid-19 restrictions in China has always raised concerns about demand from the world’s largest importer of crude.

Chinese cities have begun to tighten Beijing’s zero-Covid-19 policy as the outbreak expands, thwarting earlier hopes of a demand revival.

At the same time, some of the major US producers indicated a slowdown in the productivity of the Permian field, which is the largest shale oil field in America.

The warnings came as US oil exports surged to a record high last week, partly pushing up WTI prices 3.4 percent. Brent rose 2.4 percent last week, achieving weekly gains for the second week in a row.