Oil Futures Settle Sharply Lower On Demand Concerns

Crude oil prices drifted lower on Monday as data from China raised concerns about the outlook for energy demand outweighed uncertainty about supply.

Rising tension between Washington and Beijing following the Biden administration announcing new export controls targeting Chinese companies hurt as well.

Oil prices surged higher in recent sessions, lifted by OPEC and its allies’ decision to cut output by 2 million barrels per day from November, and Russia’s reiteration that it won’t sell oil to countries that adopt a U.S.-led price cap.

West Texas Intermediate Crude oil futures for November ended lower by $1.51 or about 1.6% at 91.13 a barrel.

Brent crude futures were down $1.94 or 1.95% at $95.98 a barrel a little while ago.

Services activity in China during September contracted for the first time in four months as COVID containment measures hit demand and business confidence, data showed on Saturday.

The Caixin services purchasing managers’ index (PMI) fell to 49.3 from 55.0 in August.

Meanwhile, Chinese cities are imposing fresh lockdowns and travel restrictions after the number of new daily Covid-19 cases tripled during a weeklong holiday.

Authorities in Fenyang, a city in the northern province of Shanxi, announced a lockdown after the discovery of a single preliminary positive case.

In far-western Xinjiang, about 22 million people were banned from leaving the region last week due to rising cases.

Two Shanghai districts have closed all entertainment venues to control and prevent new Covid-19 cases.

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