# Oil prices slide as hopes for China demand rebound fade Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-11-07 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil prices drop as China vows to stay committed to Meta Description: Find out why oil prices fell over $1 a barrel on Monday due to China's commitment to strict COVID containment measures, impacting global demand. URL: https://financedigest.com/oil-prices-slide-as-hopes-for-china-demand-rebound-fadehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-11-06t235805z1lynxmpeia50arrtroptp4global-oil-reserves-japan-1736814908201-compressed.jpg) By Florence Tan SINGAPORE (Reuters) -Oil prices fell more than $1 a barrel on Monday after Chinese officials on the weekend reiterated their commitment to a strict COVID containment approach, dashing hopes of an oil demand rebound at the world’s top crude importer. Brent crude futures dropped $1.20, or 1.2%, to $97.37 a barrel by 0227 GMT, after hitting as low as $96.50 earlier. U.S. West Texas Intermediate crude was at $91.24 a barrel, down $1.37, or 1.5%, dropping to a session-low of $90.40 a barrel earlier in the session. [“Oil prices](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") dropped sharply as the Chinese officials vowed to stick to the COVID-zero policy while infected cases climbed in China, which may cause more restrictions measures, darkening the demand outlook,” CMC Markets analyst Tina Teng said. A jump in the U.S. dollar is also weighing on [oil prices](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook"), she added. Four Federal Reserve policymakers on Friday indicated they would still consider a smaller interest [rate hike at their next policy meeting despite strong jobs](https://www.financedigest.com/italy-jan-jobless-rate-edges-up-to-7-9-with-35000-jobs-created.html "Italy Jan jobless rate edges up to 7.9%, with 35,000 jobs created") data. Brent and WTI rose last week, up 2.9% and 5.4%, respectively, as rumours of a possible end to stringent COVID-19 lockdowns sent China’s stock markets and [prices of commodities higher despite the lack of any announced changes](https://www.financedigest.com/explainer-oil-price-surge-changes-ecb-narrative-only-at-the-margins.html "Explainer-Oil price surge changes ECB narrative only at the margins"). However, at a news conference on Saturday, health officials said they will persevere with their “dynamic-clearing” approach to [COVID cases](https://www.financedigest.com/covid-cases-surpass-400-million-as-omicron-grips-world.html "COVID cases surpass 400 million as Omicron grips world") as soon as they emerge. [Trade data from the world’s](https://www.financedigest.com/at-chinas-largest-trade-fair-exporters-worry-about-world-economy.html "At China’s largest trade fair, exporters worry about world economy") No. 2 economy later on Monday could show further cooling in exports as [global demand](https://www.financedigest.com/artificial-intelligence-goes-global-demand-for-ai-reaches-four-continents-in-three-months-new-figures-from-synechron-show.html "Artificial Intelligence goes global: demand for AI reaches four continents in three months, new figures from Synechron show") continued to soften. The market is still dealing with signs of weakness in [oil demand](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") from already high prices and the weak economic backdrop in developed markets,” ANZ analysts said in a note, adding demand in Europe and the United States have fallen back to 2019 levels. We now expect [global demand](https://www.financedigest.com/global-factory-activity-weakens-as-demand-falters.html "Global factory activity weakens as demand falters") in Q4 2022 to grow by only 0.6 mb/d (millions of barrels per day) from the same quarter last year and to moderate next year. [Oil prices](https://www.financedigest.com/shares-fall-with-oil-prices-amid-concerns-about-u-s-fed-rate-hikes.html "Shares fall with oil prices amid concerns about U.S. Fed rate hikes") are underpinned by expectations of tighter supplies as the European Union’s embargo on Russia’s seaborne crude exports will start on Dec. 5 while refineries worldwide are ramping up output to meet [strong diesel demand](https://www.financedigest.com/lego-posts-strong-growth-on-robust-demand-new-store-openings.html "Lego posts strong growth on robust demand, new store openings"). U.S. oil refiners this quarter will run their plants at breakneck rates, near or above 90% of capacity, while [China’s largest](https://www.financedigest.com/taiwan-reports-chinas-largest-incursion-yet-to-air-defence-zone.html "Taiwan reports China’s largest incursion yet to air defence zone") private refiner Zhejiang Petroleum and Chemical Co (ZPC) is raising diesel output. Kuwait Integrated Petroleum Industries Co (KIPIC) said on Sunday the first phase of the Al-Zour refinery has started [commercial operations](https://www.financedigest.com/iveco-to-transfer-nordic-retail-and-commercial-operations-to-hedin.html "Iveco to transfer Nordic retail and commercial operations to Hedin"), according to state news agency (KUNA). (Reporting by Florence Tan; Editing by Lincoln Feast and Kenneth Maxwell) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---