LONDON, July 12 (Reuters): Oil prices fell sharply on Tuesday on a strong dollar, demand-sapping COVID-19 curbs in top crude importer China and fears of a global economic slowdown.
Brent crude futures were down by $6.15, or 5.7 per cent, at $100.95 a barrel by 1347 GMT. US West Texas Intermediate crude was down $6.30, or 6.1 per cent, at $97.79.
The euro lost ground on Tuesday, trading near parity with the dollar, while stock markets fell on the prospect of rising interest rates and worries over economies worldwide.
A stronger US currency usually weighs on oil because it makes the dollar-priced commodity more expensive for holders of other currencies.
"In the West, the combination of high energy prices and rising interest rates is fuelling concerns about a recession that would have a serious impact on oil demand," Commerzbank said.
Renewed COVID-19 mobility curbs in China were also weighing on prices, the bank said.
Multiple Chinese cities are adopting fresh COVID-19 curbs, from business shutdowns to broader lockdowns in an effort to rein in new infections from the highly infectious BA.5.2.1 subvariant of the virus.
US President Joe Biden will make the case for higher oil production from OPEC when he meets Gulf leaders in Saudi Arabia this week, White House National Security Adviser Jake Sullivan said on Monday.
"Little hope is being assigned to Biden's visit to Saudi Arabia unlocking more production from them or the UAE," Jeffrey Halley, OANDA's senior market analyst for Asia Pacific, said in a note.
Spare capacity within the Organization of the Petroleum Exporting Countries (OPEC) is running low, with most producers pumping at maximum capacity.
US Treasury Secretary Janet Yellen is in Asia to discuss ways to strengthen sanctions on Moscow, including a price cap on Russian oil to limit the country's profits and help to lower energy prices.
Oil slides on strong dollar and weaker demand outlook
FE Team | Published: July 12, 2022 21:25:34
Oil slides on strong dollar and weaker demand outlook
Share if you like