Crude oil fell on Monday as traders tracked COVID-19 situation in China and prospect of additional crude releases from strategic reserves.
U.S West Texas Intermediate dipped below $99 a below $99 a barrel after dragging gain down by 13% last week while Brent is trading around $103 a barrel.
China is faced with renewed COVID-19 wave and lockdown in Shanghai poses threat to substantial demand cutback. Chinese state media reported a case with a new subtype.
Besides, U.S. benchmark dipped most in two years last week after the Biden administration announced a massive release of crude from strategic reserves to combat energy prices that have been buoyed by Russia’s invasion of Ukraine.
Allies within the International Energy Agency will also tap stockpiles, with details expected this week.
“It looks like the U.S. SPR move broke crude’s rally,” Vandana Hari, founder of Vanda Insights in Singapore as reported by Bloomberg.
“A bit of relief on the supply front naturally makes space for the market to take in demand worries on the back of continuing outbreaks and lockdowns in China.”
Oil traders are tracking war talks and restoration of a 2015 nuclear according with Iran after Tehran said that it’s close to reaching an agreement with the U.S.
Saudi Arabia in the coming days when Saudi Aramco releases official selling prices for May-loading cargoes.
