Oil slips, WTI below $80 amid China COVID crisis, recession fears
Oil prices fell on Monday, extending steep losses from last week as concerns over rising Chinese COVID-19 infections and a potential global recession dampened the outlook for demand.
Reports also suggested that crude supply in Europe had stabilized, with refiners steadily building up stocks ahead of a Western ban on Russian crude exports. But the ban is still expected to tighten crude supplies in the coming months, particularly if inventories deplete at faster-than-expected levels.
Still, Brent oil futures sank 1.1% to $86.82 a barrel in early Asian trade, while West Texas Intermediate crude futures fell 0.8% to $79.42 a barrel. Both contracts plummeted nearly 10% last week and were trading at their weakest levels in two months.
Prices also entered “contagion” mode last week, a market structure that heralds more price declines.
Rising COVID-19 cases in China invited new lockdown measures in some of the country’s biggest cities, drumming up concerns over slowing crude demand in the world’s largest oil importer. The country is currently struggling with its worst COVID outbreak since April, which had seen several cities placed under lockdown.
TRADE SUGGESTION- SELL AT 86.60, TARGET 83.62, SL AT 89.00