Crude Oil Extends Drop on Demand Concerns

WTI Crude OI: fell almost 3% to below $102 per barrel on Tuesday, extending losses from the previous session, as fresh Covid-19 curbs in top importer China and mounting fears of a global economic slowdown weighed on the market.

About 30 million people in China are under some form of movement restrictions as the country grapples with resurgent virus outbreaks, with a highly-contagious Omicron subvariant being detected in Shanghai.

Oil prices have also been declining since mid-June on recession fears as central banks race ahead with aggressive rate hikes to combat surging inflation. Moreover, President Joe Biden is set to visit Saudi Arabia this week amid efforts to bring down energy prices.

Meanwhile, persistent supply concerns kept markets on edge, as major producers are limited by capacity constraints while Russian supply remains mired in sanctions due to its invasion of Ukraine.