Oil tumbles as investors wary of dwindling fuel demand amid restrictions in China
Oil prices fell on Thursday as investors were wary of declining fuel demand in China, the world's largest oil importer, amid COVID-19 restrictions.
Brent crude futures fell $1.48, or 1.41%, to $103.84 a barrel as of 0426 GMT. West Texas Intermediate (WTI) crude futures fell $1.39, or 1.36%, to $100.63 a barrel.
Both contracts were up more than 30 cents in the previous session amid continued concerns about tight supply worldwide and slumping US distillate stocks.
The U.S. Energy Information Administration (EIA) said crude oil inventories rose just 692,000 barrels last week, below expectations, while distillate stockpiles, which include diesel, gasoline and jet fuel, fell to their lowest level since May 2008.
Beijing, the Chinese capital, closed some public spaces and increased checks in others on Thursday as it began more COVID-19 mass testing aimed at avoiding a Shanghai-like lockdown.
Sinopec Corp, Asia's largest oil refinery, expects China's demand for refined petroleum products to recover in the second quarter as the COVID-19 outbreaks in the country are gradually brought under control.
Analysts also point out that the slowdown in global growth due to rising commodity prices and the escalation of the Russia-Ukraine conflict may further raise concerns about oil demand.
According to surveys, the global economy will grow more slowly than predicted three months ago. Traders are struggling to steer their investments amid supply and demand concerns from Russia's oil and gas cuts and the worsening global economy.
Meanwhile, Japan, another major buyer of crude oil, continued its commitment to keeping interest rates ultra-low to support the fragile economy.
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