Oil prices fall as China Covid-19 lockdown measures reduce demand
Oil prices eased as unrest in China over Covid-19 lockdown measures hurt appetite for risk and the outlook for demand, adding to stresses in an already-fragile market.
Oil prices eased on Friday as unrest in China over Covid-19 curbs hurt investor appetite for risk and the outlook for oil demand. This added to the already-fragile market conditions and created further stress for oil prices.
The market is bearish on oil prices in the near future, as demand signals weaken and European Union negotiations over a Russian crude price cap drag on. The stronger dollar is also weighing on oil prices, as investors seek out safe haven assets. protests against strict anti-virus measures are also spreading in major importer countries, further depressing demand prospects.
Oil prices have fallen sharply in recent weeks, adding to the already volatile energy markets. The Russian invasion of Ukraine, aggressive central bank tightening to combat inflation, and China's relentless attempts to eradicate Covid-19 have all contributed to the market instability. Beijing has not yet publicly responded to the growing unrest, but the Communist party's mouthpiece, the People's Daily, has ran a front page story reiterating the need to stick to the Covid Zero strategy. It is unclear how the situation will develop, but it is clear that the energy markets will continue to be volatile in the near future.
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