China’s COVID-19 Growth Sends Crude Oil Futures Down

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  • Meanwhile, COVID-19 cases continued to grow in Shanghai, currently the epicentre of the outbreak in China.
  • There were 914 symptomatic cases and 25,173 asymptomatic cases in the city as of April 10, the local government said on its official WeChat account on April 11, making for a fresh record high of 26,087 cases in total.
  • The June Dubai swap was pegged at $94.74/b at 10 am Singapore time (0200 GMT), down 58 cents/b (0.61%) from the April 8 Asian market close.

Crude oil prices fell in Asia’s mid-morning session on April 11 as investors worried about China’s fight against a COVID-19 increase and the release of oil reserves from consuming nations as reported by S&P Global.

COVID-19 concerns

At 10:21 am Singapore time (0221 GMT), the ICE June Brent futures contract was down $2.75/b (2.68%) from the previous close to $100.03/b, while the NYMEX May light sweet crude contract fell $2.76/b (2.81%) at $95.50/b.

“Oil price gains still feel limited amid China’s COVID-19 concerns and global recession worries in the face of more hawkish central bank policies,” said SPI Asset Management Managing Partner Stephen Innes in an April 11 note, adding that the emergency oil reserve release by the International Energy Agency also weighed on prices.

Meanwhile, COVID-19 cases continued to grow in Shanghai, currently the epicentre of the outbreak in China.

There were 914 symptomatic cases and 25,173 asymptomatic cases in the city as of April 10, the local government said on its official WeChat account on April 11, making for a fresh record high of 26,087 cases in total.

Limited restrictions

In a grim portent for oil demand in the world’s second-largest oil consumer, authorities in other cities, including Ningbo and Beijing, have begun implementing limited restrictions to curb the spread of the virus, according to media reports.

The latest developments will add to growing worries over the outlook for oil, coming after the US, followed by the IEA, announced over the last two weeks oil reserve releases totalling around 240 million barrels over the next six months.

Dubai crude swaps were lower in mid-morning trade in Asia on April 11 from the previous close, though inter month spreads were higher.

The June Dubai swap was pegged at $94.74/b at 10 am Singapore time (0200 GMT), down 58 cents/b (0.61%) from the April 8 Asian market close.

The May-June Dubai swap inter month spread was pegged at 87 cents/b at 10 am, up 8 cents/b over the same period, and the June-July spread was pegged at 71 cents/b, up 13 cents/b.

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Source: S&P Global

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