Oil edged down towards $100 a barrel as China grapples with renewed virus outbreak dampening outlook for global oil demand.
Crude oil WTI futures declined 1.5% after closing higher on Wednesday while Brent declined by 1.43%.
Hangzhou is the latest Chinese city to start mass virus testing, while the nation’s top state-run oil processor said during an earnings call that the resurgence was slowing fuel demand.
There are some signs that the outbreak is easing, but lockdowns have led to stockpiles swelling in the world’s biggest crude importer.
“The oil market continues to be torn between a bullish supply outlook and a bearish demand picture,” said Warren Patterson, the Singapore-based head of commodities strategy at ING Groep NV.
“Supply risks around Russian oil are longer term in nature compared to the Covid-related demand hit in China. As a result, we would expect prices to remain well supported.”
Russia’s finance minister said the nation’s oil output may drop by as much as 17% this year as buyers shun its crude.
