Oil is falling due to fears of increasing Covid cases in China and possibility of a global recession

Oil prices fell on Wednesday on fears that a rising number of COVID-19 cases in China, the world’s largest oil importer, would impede the Asian country’s economic recovery as it eases pandemic restrictions, curbing oil demand growth.

And by 0710 GMT, Brent crude futures for February delivery fell 68 cents, or 0.8 percent, to $ 83.65 a barrel, and West Texas Intermediate crude futures fell 46 cents, or 0.6 percent, to $ 79.07 a barrel.

In light of the optimism that dominates the market, the two benchmarks recorded their highest weekly levels in three weeks on Tuesday, after China said that it would stop obliging arrivals to enter quarantine, starting from January 8, in a major step towards easing strict restrictions on its borders.

“Even with China easing Covid restrictions, it is difficult for demand to recover in the short term given the sharp decline in overseas activities due to the large number of infections,” said Leon Lee, an analyst at CMC Markets.