Oil prices plunge on China lockdowns, stocks waver

Oil prices plunge on China lockdowns, stocks waver

LONDON: Oil prices plunged yesterday major crude consumer and global economic engine China placed nearly 30 million people under COVID lockdown. Hong Kong, Chinese mainland and European markets slumped, but Wall Street opened higher, with investors tracking the resurgence of the coronavirus in China, the war in Ukraine and a key US Federal Reserve policy meeting.

Crude futures slumped under $100 per barrel just a week after benchmark contract Brent North Sea soared to a 14-year high close to $140 following Russia’s invasion of Ukraine. “We have good news and we have bad news,” said Briefing.com analyst Patrick O’Hare. “The good news is that oil prices are down sharply… The bad news is that the big drop in oil prices is due to growth concerns which, by extension, don’t bode well for earnings growth prospects,” O’Hare said.

While the drop in oil prices could ease inflation concerns, analysts warned that the lockdowns in China could worsen a global supply-chain crisis that has played a major role in driving up prices. The stock market “negativity has spread beyond China’s borders with chip makers in Europe taking a hit,” said Victoria Scholar, head of investment at Interactive Investor. The virus situation in the world’s second-biggest