Oil falls as Saudi Arabia eyes OPEC increase, China COVID deaths
BNN Bloomberg
Oil extended declines as Saudi Arabia and other OPEC countries were reported to be discussing an output increase alongside China tightening its anti-COVID curbs, hurting the outlook for demand.
Global benchmark Brent fell below US$85 a barrel for the first time since September on Monday. Prices slumped on news that OPEC+ is considering an output increase of 500,000 barrels ahead of the EU’s embargo of Russian oil, the Wall Street Journal reported. If confirmed, the production increase would come as market sentiment has shifted, with the price of physical barrels dropping and the U.S. prompt-spread in contango.
China saw its first COVID-related deaths in almost six months over the weekend, just as a city of 11 million near the capital asked residents to stay home amid an outbreak, sparking fears of a further wave of restrictions in the world’s biggest oil importer. Goldman Sachs Group Inc. lowered its fourth-quarter forecast for Brent crude by US$10 to US$100 a barrel, according to a note, with the reduction driven in part by the possibility of further anti-virus measures in China as cases climb.
