Oil prices fall amid concerns about Chinese demand and recession

Oil prices fell on Tuesday, as fears of a recession and the worsening outbreak of the Coronavirus in China raised expectations of lower demand for fuel, outweighing concerns about supplies.

Brent crude fell 23 cents, or 0.2 percent, to $ 97.69 a barrel by 0726 GMT, while US West Texas Intermediate crude fell 32 cents, or 0.4 percent, to $ 91.47.

The two benchmarks hit their highest level since August on Monday, amid reports that leaders in China, the world’s largest crude importer, are looking to lift the country’s strict curbs to combat COVID-19.

But at the beginning of the week, Chinese health officials confirmed that China would adhere to its strict approach to achieving (zero Covid). The latest data also showed China’s exports and imports contracted unexpectedly in October.

The dollar’s strength also affected oil prices. Oil is generally priced in US dollars, so a stronger dollar makes the commodity more expensive for holders of other currencies.

Tina Ting, an analyst at CMC Markets, said market players will look forward to the US consumer price index data this week for indications regarding trading.

“Against the backdrop of difficult inflation and high-interest rates in major Western countries, oil futures contracts continue to consider the possibility of a global economic recession,” she added.