Oil futures remained under pressure Friday, trading at two week lows as a resurgence of COVID-19 worries clouded the energy demand picture, and broader markets kept eyes on a hawkish Federal Reserve.
U.S. crude prices on Thursday ended at their lowest since late September, as China’s zero-COVID policy revived concerns the world’s second-largest economy would buy less oil and gas. There was little fresh news Friday to change that outlook. China’s State Council warned cities to avoid “irresponsible loosening” of COVID-19 measures, according to the South China Morning Post. The Wall Street Journal reported a sevenfold surge in COVID infections in the past two weeks in China, even as the nation’s new policy of loosened measures was aimed at reducing the impact of zero-COVID restrictions.
“It is still unclear what impact the upcoming European Union embargo and the price cap that is to be set in the next few days will have on Russian supply,” the analysts continued in their note. “As yet, Russia still appears to be finding sufficient buyers and is even stepping up its oil production. That said, we are convinced that these two factors will drive down supply, which should lend support to prices in the coming weeks.
“Every time a piece of good news on the inflation front leads to some loosening of financial conditions, the Fed sees no choice but to rein in the optimism…,” said Raffi Boyadjian, lead investment analyst with XM.
To bad oil stocks are not following. Biggest gas ever between the stocks and commodity itself. Why? Cause i am short. And I am holding a ton of puts. Once I get destroyed on my puts. Oil stocks will retreat 20%