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Oil prices are down $7 as fears of slowing demand grow

Oil prices

London, (Business News Report)|| Oil prices fell, on Tuesday morning, with growing fears of weak demand for fuel in China, at a time when Shanghai announced the closure of the country’s financial center to conduct Coronavirus tests over a period of nine days.

Oil prices deepened their losses, and Brent crude fell more than $7 to $113.17 a barrel. And US crude fell $7 to $106.90 a barrel.

Brent crude futures fell to $115.32 and fell $5.15, or 4.3 percent, to $115.50.

And US West Texas Intermediate crude futures recorded their lowest level at $108.28 a barrel, down $5.30, or 4.7 percent, to $108.60.

Brent crude futures fell to $116.00 a barrel, and were trading down $3.88, or 3.2 percent, at $116.77.

US West Texas Intermediate crude futures recorded their lowest level, reaching $109.30 a barrel, and fell $3.92, or 3.4 percent, to $109.98.

Both contracts rose 1.4 percent on Friday, marking their first weekly increase in three weeks, with Brent gaining more than 11.5 percent and West Texas Intermediate crude rising 8.8 percent.

“Shanghai’s lockdown prompted a fresh sell-off from disappointed investors as they expected such a lockdown would be avoided,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.

He added that the market had absorbed the impact of a missile attack on a Saudi oil distribution facility last Friday.

“Since it is unlikely that OPEC+ will increase oil production at a faster pace than in recent months, we expect the oil market to turn bullish again later this week,” he said.

The Shanghai city government said all businesses and factories would shut down or have employees work remotely as part of a two-phase shutdown over nine days, after the city set a new record for asymptomatic cases.

Public transportation, including transportation services, will also be suspended during the closure, further reducing fuel demand.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies known as OPEC+ are scheduled to meet on Thursday.

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