Oil market sinks on China demand fears, Ukraine

In afternoon deals, United States benchmark oil West Texas Intermediate dived as low as $92.93 per barrel and European Brent hit $97.57

Oil sank on Monday on Chinese demand fears, the recent release of strategic reserves, and dimming hope of a European embargo on Russian supplies in the wake of the Ukraine war.

In afternoon deals, United States benchmark oil West Texas Intermediate dived as low as $92.93 per barrel and European Brent hit $97.57.

“It is above all the bad news from China that is weighing on prices, as the number of COVID-19 cases continues to surge,” said Commerzbank analyst Barbara Lambrecht.

“The lockdowns that are slowing oil demand in the world’s second-largest consumer country threaten to persist for even longer.”

Shanghai eased restrictions on some neighbourhoods on Monday after mounting outcry over China’s inflexible Covid-19 rules that locked down 25 million people and sparked fears over energy demand.

Rich countries will meanwhile tap an additional 120 million barrels of oil from emergency reserves in a bid to calm prices that had soared on Russia’s invasion of Ukraine, the International Energy Agency said last week.

The move included Washington’s recent announcement of the release of 60 million barrels.