Oil prices fell in volatile trade on Tuesday as investor concerns about lower demand in China, the world’s biggest crude importer, and further increases in U.S. and European interest rates offset worries about tight fuel supplies ahead of winter. Brent crude slid 34 cents, or 0.4%, to $93.66 a barrel by 0445 GMT, while WTI crude declined by 20 cents, or 0.2%, to $87.58 a barrel.
Both contracts fell by more than $1 earlier in the session, snapping a three-day rally. COVID-19 curbs in China, the world’s second-largest oil consumer, renewed concerns about lower global fuel demand.
The number of journeys taken during the country’s three-day mid-Autumn festival dropped by more than a third compared with last year, a state media report said on Monday, as the country’s zero-COVID policy discouraged people from traveling.
“The extensive COVID lockdowns and mass testing in China weigh on oil markets due to demand concerns,” said Tina Teng, an analyst at CMC Markets. “Plus the odds for the Fed to keep aggressive rate hikes will be strengthened if U.S. CPI comes out hotter than expected.”
