Oil futures: Crude tumbles 3% amid China uncertainty, firmer dollar
Quantum Commodity Intelligence - Crude oil futures Monday were sharply lower, giving up earlier gains as the market struggled to consolidate the increases seen at the back end of last week.
Front-month January ICE Brent futures were trading at $93.22/b (1920 GMT), compared to the day's high of $96.95/b and Friday's settle of $95.99/b.
At the same time, Dec22 NYMEX WTI was trading $85.89/b versus Friday's settle of $88.96/b.
Crude benchmarks largely gave up the gains from the rebound late last week, as mixed messages from China over its Covid policy continued to cause uncertainty.
"Oil prices were getting a reprieve from the weaker US dollar, and a significant repricing lower in US recession risk as a soft landing looks far more credible with the Fed likely to dial down," said Stephen Innes, managing partner SPI Asset Management.
However, Innes cautioned that oil prices were "the risk-rally laggard" across financial markets as short-term sentiment is still sullied by the rise of Covid cases in China.
Beijing officials over the weekend dampened speculation it was preparing to reopen the country and abolish zero-Covid rules by March, as the country reported almost 15,000 new cases on Saturday, including a surge in cases in the capital Beijing, along with manufacturing hubs Guangzhou and Zhengzhou.
Prices also eased as the dollar index rebounded over 0.5% Monday, moving to around 107 points.
In addition, OPEC has made another cut to its global oil demand growth forecast, shaving around 100,000 bpd from its projections for both 2022 and 2023.
OPEC revised 2023 world oil demand growth down 2.2 million bpd at an average of 101.8 million bpd, with the growth figure supported by expected geopolitical improvements and the containment of Covid-19 in China.
Meanwhile, industrial action at one of Europe's largest oil refineries is set to start on Monday after British oil giant BP rejected the salary demands from Dutch unions representing works in Rotterdam, the unions told Quantum.
Disruption to the 400,000-bpd Rotterdam refinery will likely upset Europe's delicate diesel balance heading into the key winter heating season and fears over Russian supplies.
