Oil slips as Shanghai lockdowns potentially curb China’s demand

Oil edged lower as renewed lockdowns in parts of Shanghai potentially dampen global fuel demand and ease pressure on tight markets.

West Texas Intermediate futures traded just under US$122 a barrel on Thursday, still hovering near a three-month high as low fuel inventories underscore precarious supply balances. Shanghai is reinstating major restrictions on movement to stem the spread of COVID, calling into question the demand recovery in one of the world’s biggest oil-consuming countries. The financial hub lifted a two-month shutdown at the start of June.

“Crude futures are also in an overbought condition and a corrective phase is definitely due,” said Dennis Kissler, senior vice president of trading at BOK Financial “Prices have to take a breather at some time and the new possible COVID issues in China are assisting this morning.”