# Oil slips on China COVID curbs, weak factory activity data Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-31 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil Prices Drop on China Factory Data, COVID-19 Concerns Meta Description: Oil prices dropped as China's factory activity slows and COVID-19 restrictions dampen demand, sending Brent crude futures down to $95.14 a barrel. URL: https://financedigest.com/oil-slips-on-china-covid-curbs-weak-factory-activity-datahtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-10-31t022537z2lynxmpei9u02irtroptp4global-oil-1736814947104-compressed.jpg) By Florence Tan and Emily Chow SINGAPORE (Reuters) -Oil prices fell on Monday following weaker-than-expected factory activity data out of China and on concerns its widening COVID-19 curbs will curtail demand. Brent crude futures dropped 63 cents, or 0.7%, to $95.14 a barrel by 0420 GMT, after slipping 1.2% on Friday. U.S. West Texas Intermediate (WTI) crude was at $87.43 a barrel, down 47 cents, or 0.5%, after settling down 1.3% on Friday. The purchasing managers’ index (PMI) [data contracting adds to the post-China congress party blues for oil](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") markets. It is not difficult to draw a straight line from weaker PMIs to [China’s COVID-zero policy,”](https://www.financedigest.com/dutch-responds-to-us-china-policy-with-a-plan-to-curb-semiconductor-tech-exports.html "Dutch responds to US China policy with a plan to curb semiconductor tech exports") said Stephen Innes, managing partner of SPI Asset Management. “So long as COVID-zero remains entrenched, it will continue to thwart oil bulls.” Factory activity in China, the [world’s largest](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") crude importer, fell unexpectedly in October, an official survey showed on Monday, weighed down by softening global demand and strict COVID-19 restrictions that hit production. [Chinese cities are doubling](https://www.financedigest.com/brexit-no-obstacle-as-chinese-overseas-property-investment-doubles.html "Brexit no obstacle as Chinese overseas property investment doubles") down on Beijing’s zero-COVID policy as outbreaks widen, dampening earlier hopes of a rebound in demand. Strict COVID-19 curbs in [China have dampened economic and business](https://www.financedigest.com/credit-agricole-launches-china-ma-and-investment-banking-business.html "Credit Agricole launches China M&A and investment banking business") activity, curtailing oil demand. [China’s crude oil](https://www.financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focus.html "Oil rises about 2% with U.S. and China inflation in focus") imports for the first three quarters of the year fell 4.3% from the same period a year earlier – the first annual decline for this period since at least 2014 – as Beijing’s drastic COVID-19 curbs hit fuel consumption hard. A further risk to [oil demand](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") comes from Europe, said CMC Markets analyst Leon Li, as the continent “is likely to enter a recession this winter”, he said. The euro zone is likely entering a recession with its October business activity contracting at the fastest in nearly two years, according to a S&P [Global survey](https://www.financedigest.com/new-york-catches-up-with-london-to-head-citys-global-centres-survey.html "New York catches up with London to head City’s global centres survey"), as rising costs of living keeps consumers cautious and saps demand. European Central Bank policymakers are also standing [behind plans](https://www.financedigest.com/paw-patrol-unleashed-behind-viacomcbss-plan-to-take-on-disney.html "‘Paw Patrol’ unleashed: Behind ViacomCBS’s plan to take on Disney") to keep raising interest rates, even if it pushes the bloc into recession and stirs political resentment. Meanwhile, some of the largest U.S. [oil producers on Friday signalled that productivity and volume gains](https://www.financedigest.com/oil-prices-stable-heading-for-weekly-gain.html "Oil prices stable, heading for weekly gain") in the Permian Basin – the nation’s top shale field – are slowing. The warnings came just as U.S. [oil exports rose to a record](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") last week, partly pushed WTI prices up 3.4%. Brent rose 2.4% last week, notching its [second consecutive weekly gain](https://www.financedigest.com/bayer-shares-gain-on-prospect-of-second-activist-pushing-for-change.html "Bayer shares gain on prospect of second activist pushing for change"). In an outlook to be released on Monday, the Organization of the Petroleum Exporting Countries is expected to stick to a view of [oil demand rising](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") for another decade, despite increasing use of renewable energy and electric cars, two OPEC sources said. (Reporting by Florence Tan and Emily Chow; Editing by Tom Hogue) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---