Oil falls $2 on China Covid surge

Virus cases dash hopes of China’s economy reopening

NEW YORK:

Oil prices fell by $2 on Monday, dragged down by a firmer US dollar while surging coronavirus cases in China dashed hopes of a swift reopening of the economy for the world’s biggest crude importer.

Brent crude futures were down $2.25, or 2.5%, at $95.23 a barrel by 1700 GMT after gaining 1.1% on Friday. WTI crude futures fell $2.25, or 2%, to $88.03 after advancing 2.9% on Friday.

Commodities’ prices rallied on Friday after China’s National Health Commission adjusted its Covid prevention and control measures to shorten quarantine times for close contacts of cases and inbound travellers. But Covid-19 cases climbed in China over the weekend, with Beijing and other big cities on Monday reporting record infections.

The US dollar also rose against the euro and yen on Monday, as investors eyed potential future US Federal Reserve interest rate hikes after a policymaker said too much was being made of last week’s cooler US inflation data.

A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies and tends to weigh on oil and other risk assets.

Published in The Express Tribune, November 15^th, 2022.

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