The price of Texas intermediate oil (WTI) opened this Wednesday with a fall of 2.76%, to 74.81 dollars a barrel, with investors increasingly concerned that the rebound in cases of covid-19 in China – the main importer of Petroleum of the world – may affect demand.
At 9:00 a.m. local time NY (14:00 GMT), WTI futures contracts for February delivery lost $1.12 compared to the close of the previous day.
COVID in China
As of January 8, the covid-19 will cease to be a category A disease in Chinathe level of maximum danger and for whose containment the most severe measures are required, to become a category B, which contemplates a more lax control.
In that panorama marks, in practice, the end of the policy of “zero covid“, dismantled by the authorities after protests broke out.
Initially, investors looked favorably on the fact that China lift its harsh restrictions against pandemicsince it would revitalize the economy and give wings to the demand for crude oil in the country.
But with the increase in covid-19 cases, investors fear that this will end up negatively affecting crude oil consumption and creating bottleneck in supply chains.
“The chinese government raised the export quotas for refined products in a move that indicates a decline in confidence in its expectations of a recovery in domestic demand in early 2023,” Tom Essaye details this Wednesday in The Sevens Report.
