Crude Oil Lower; Supply Disruptions Start to Ease By Investing.com – Investing.com

Crude Oil Lower; Supply Disruptions Start to Ease By Investing.com – Investing.com

© Reuters.

By Peter Nurse   

Investing.com -- Oil prices weakened Monday as supply problems dissipated and concerns about the rapid rise of Omicron cases in China, the second largest economy in the world, came to the fore. 

By 9 AM ET (1400 GMT), futures traded 0.2% lower at $78.75 a barrel and the contract fell 0.2% to $81.55. 

U.S. Gasoline RBOB Futures were down 0.1% at $2.2980 a gallon.

The Chinese port city of Tianjin announced plans Monday to test its 14 million residents within the next 48 hours after the discovery of a cluster of Covid cases, including two of the highly transmissible Omicron variant.

“While we see other countries adapting to live with Covid, China clearly continues to pursue its zero-covid policy, “ said analysts at ING, in a note. “This is a risk to oil demand since China is the largest crude oil importer in the world. We are also approaching Chinese New Year, a time when there is normally plenty of domestic travel, and so any domestic restrictions will weigh on oil consumption.”

Still, while this potential hit to demand is important, the market is still mostly focusing on supply dynamics.

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