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China is battling a rebound in infections in several
economically vital cities, including the capital Beijing. In the
manufacturing hub of Guangzhou, millions of residents were told
to get tested for COVID-19 on Wednesday.
"Chinese COVID-related demand woes, the reinvigorated dollar and
a loose fourth-quarter oil balance could push prices further
south," said Tamas Varga of oil broker PVM. The downside could
be limited with the European Union ban on Russian oil and G7
price cap looming, he added.
Brent crude was down 29 cents, or 0.3%, to $92.36 a barrel at
1120 GMT. U.S. West Texas Intermediate (WTI) crude fell 50
cents, or 0.6%, to $85.33.
"While the narrative in recent weeks has focused on the
potential for Chinese COVID restrictions to be relaxed... the
reality has seen case numbers soaring, restrictions reimposed
and mass testing undertaken," said Craig Erlam of brokerage
OANDA.
Crude surged earlier this year as Russia's invasion of Ukraine
raised concern about supply, with Brent coming close to its
all-time high of $147. Prices have since fallen on concern of
recession and Brent has dropped more than 6% this week.
The market came under pressure on Wednesday from a big rise in
U.S. crude inventories. They rose by 3.9 million barrels, taking
inventories to their highest since July 2021.
With no final results yet available from the U.S. mid-term
elections, in focus later on Thursday will be U.S. inflation
data which is likely to show a slowing in both the monthly and
yearly core numbers for October, according to a Reuters poll.
That may lead the U.S. Federal Reserve to reduce the size of its
planned interest rate increases, which would be considered
positive for economic and oil demand growth.
(Additionalreporting by Sonali Paul in Melbourne and Muyu Xu in
Singapore; Editing by Susan Fenton, Kirsten Donovan)
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