Crude Oil Drops to $100 Level amid Fears of Demand Cutback from China

Oil prices inched down two week low on Tuesday amid concerns about demand after surge in COVID-19 cases in China and continued ceasefire talks between Russian and Ukraine.

U.S West Texas Intermediate (WTI) crude fell to $98.26 per barrel down by 4.66% while Brent inched down to $101 per barrel down by 4.65%.

“Expectations of positive developments in the Russia-Ukraine ceasefire talks bolstered hopes to ease tightness in the global crude market,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd, as reported by Reuters.

“Fresh lockdowns to curb the COVID-19 pandemic in China also raised concerns over slower demand,” he added.

COVID-19 infections in mainland China surged on Tuesday with Beijing maintaining “zero-COVID” policy place it tech hub Shenzen under complete lock down.

Ukraine’s President Volodymyr Zelenskiy said late on Monday that negotiations with Russia, the world’s second largest crude exporter, will continue on Tuesday.

Zelenskiy also said he spoke with Israeli Prime Minister Naftali Bennett as part of a negotiation effort to end the war with Russia “with a fair peace.”

The United States warned China after “intense” talks on Monday against helping Moscow in its invasion of Ukraine.