Oil prices fell about 2% on Tuesday, extending the previous session’s almost 2% decline, as recession fears and a flare-up in Covid-19 cases in China raised concerns over global demand.
World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva warned on Monday of a growing risk of global recession and said inflation remained a continuing problem.
Brent crude was down $1.62, or 1.7%, to $94.57 a barrel by 1614 GMT. US West Texas Intermediate crude dropped $1.72, or 1.9%, to $89.41. “There is growing pessimism in the markets now,” said Craig Erlam of brokerage Oanda.
Oil has dropped sharply on economic fears after surging earlier in 2022, when Brent came close to its record high of $147 as Russia’s invasion of Ukraine added to supply concerns. Fears of a further hit to demand in China also weighed. Authorities have stepped up coronavirus testing in Shanghai and other large cities.
“From an economic perspective, it seems like China’s throwing the baby out with the bathwater by continuing to lock down its population to lower cases,” said John Kilduff, Partner at Again Capital LLC.
Published in The Express Tribune, October 12th, 2022.