Oil steadied near an eight-month low after a brutal selloff, with investors assessing the outlook for demand as China pushes on with its Covid Zero policy and central banks tighten monetary policy to fight inflation.
(Bloomberg) — Oil steadied near an eight-month low after a brutal selloff, with investors assessing the outlook for demand as China pushes on with its Covid Zero policy and central banks tighten monetary policy to fight inflation.
West Texas Intermediate traded near $82 a barrel early in Asia after collapsing almost 6% on Wednesday, the biggest loss since mid-July. Several Chinese centers face anti-virus lockdowns, including the megacity of Chengdu, imperiling energy demand in the world’s biggest importer.
Crude has tumbled by almost $50 a barrel since peaking in March in the initial aftermath of Russia’s invasion of Ukraine. The retreat has been driven by a global slowdown as the Federal Reserve boosts rates, lifting the dollar to a record. On Wednesday, Fed Vice Chair Lael Brainard said the US central bank would have to tighten policy to restrictive levels.
Oil’s deep loss on Wednesday came despite several supportive market factors. Russian President Vladimir Putin said the country would not supply energy to any nations that backed a planned US-led price cap on the nation’s crude. In addition, the Energy Information Administration raised its outlook for global oil demand, while also cutting the forecast for US supply.
This week’s MLIV Pulse survey focuses on energy and commodities. It’s brief and anonymous. Please click here to share your views.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
