Oil stabilized after Monday’s plunge as signs that China is moving away from its strict Covid Zero policy helped stem losses from a wider market slump.
West Texas Intermediate was little changed near $77 a barrel following a roller-coaster session on Monday, when a broad shift away from risk assets saw prices close down 3.8 per cent. The city of Beijing will scrap Covid testing requirements at public venues following similar moves in other areas, bolstering the outlook for demand in the world’s largest crude importer.
- WTI for January delivery was unchanged at to $76.92 a barrel at 9:59 a.m. in London.
- Brent for February settlement added 0.2 per cent to $82.82 a barrel.
Saudi Arabia, meanwhile, lowered most oil prices for Asia, including for its flagship Arab Light grade, in a sign demand remains fragile. The move was largely in line with refiners’ and traders’ predictions, according to a Bloomberg survey. The price is now at its lowest level since March.
Oil’s time spreads have also continued to weaken, signaling ample near-term supply. WTI’s six-month spread was 40 cents a barrel in contango, a bearish pattern, compared with 64 cents a barrel in the opposite backwardated structure a week ago.
© 2022 Bloomberg L.P.