(MENAFN- Trend News Agency) Oil futures fell more than $2 a barrel on Monday, with WTI
hitting an 11-month low, as protests in top importer China over
strict COVID-19 curbs fuelled demand concerns, trend reports with reference
to reuters .
Brent crude dropped $2.16, or 2.6%, to trade at $81.47 a barrel
at 0230 GMT, after diving to $81.16 earlier in the session -- its
lowest since Jan. 11.
U.S. West Texas Intermediate (WTI) crude slid $2.08, or 2.7%, to
$74.20 a barrel. It fell as far as $73.82 earlier -- its lowest
since Dec. 27, 2021.
Both benchmarks, which hit 10-month lows last week, have posted
three consecutive weekly declines. Brent ended the latest week down
4.6%, while WTI fell 4.7%.
'On top of growing concerns about weaker fuel demand in China
due to a surge in COVID-19 cases, political uncertainty, caused by
rare protests over the government's stringent COVID restrictions in
Shanghai, prompted selling,' said Hiroyuki Kikukawa, general
manager of research at Nissan Securities.
WTI's trading range is expected to fall to $70-$75, he said,
adding the market could stay volatile depending on the outcome of
the OPEC+ meeting and the price cap on Russian oil.
China, the world's top oil importer, has stuck with President Xi
Jinping's zero-COVID policy even as much of the world has lifted
most restrictions.
Hundreds of demonstrators and police clashed in Shanghai on
Sunday night as protests over China's strict COVID restrictions
flared for a third day and spread to several cities in the wake of
a deadly fire in the country's far west.
The wave of civil disobedience is unprecedented in mainland
China since Xi assumed power a decade ago, as frustration mounts
over his zero-COVID policy nearly three years into the
pandemic.
'Bearish sentiment is growing in the oil market with mounting
concerns over demand in China and a lack of clear signs from oil
producers to further cut output,' said Tetsu Emori, CEO of Emori
Fund Management Inc.
'Unless OPEC+ agrees on a further reduction of production quota
or the United States moves to reload its strategic petroleum
reserves, oil prices may be headed further down,' he said.
The Organization of the Petroleum Exporting Countries and
allies, known as OPEC+, will meet on Dec. 4.
In October, OPEC+ agreed to reduce its output target by 2
million barrels per day through 2023. read more
The next OPEC+ meeting will take into account the condition and
balance of the market, Iraq's state news agency quoted Saadoun
Mohsen, a senior official at the country's state oil marketer SOMO,
as saying on Saturday. read more
Investors also focused on Western plans for a price cap on
Russian oil.
Group of Seven(G7) and European Union diplomats have been
discussing a price cap on Russian oil of between $65 and $70 a
barrel.
But a meeting of European Union government representatives,
scheduled for Nov. 25 evening to discuss the issue, was cancelled,
EU diplomats said. On Thursday, EU governments were split on the
level at which to cap Russian oil prices.
The price cap is due to come into effect on Dec. 5 when an EU
ban on Russian crude kicks off.