West Texas Intermediate slipped below US$86 a barrel. China's anti-virus policies are hurting consumption, with the country now adding curbs in the southern manufacturing hub of Guangzhou.
After Brent crude rallied toward US$100 earlier this week, prices have pulled back on concerns about the demand outlook. Still, futures have regained some ground this quarter after the Organization of Petroleum Exporting Countries and its allies agreed to reduce supply, and traders are now looking ahead to U.S. inflation data due later.
“The US CPI data is expected to provide some guidance how successful the Fed's efforts in tackling entrenched inflation are,” said Tamas Varga, an analyst at PVM Oil Associates. “Chinese COVID-related demand woes, the reinvigorated dollar and a loose 4Q oil balance could push prices further south, but it is worth remembering that the EU oil boycott and the G7 price cap are less than a month away.
The disruption to Russian oil flows is creating turmoil in the oil tanker market. Benchmark supertanker earnings neared US$80,000 a day on Wednesday, the highest level since May 2020. Tanker owners have said in earnings calls that they expect cargo distances to increase in the coming months due to sanctions on Russian exports.WTI for December delivery dipped 0.5 per cent to US$85.41 a barrel at 10:09 a.m. in London. Earlier added as much as 0.
Brent for January settlement was 0.3 per cent lower at US$92.39. Earlier gained as much as 0.3 per cent