On Wednesday, as China implemented a further lockdown to stop the spread of Covid-19, international crude oil prices fell amid concerns that demand would drop. The expectation of an interest rate increase has also dampened investment morale.

At 10.45 am, the Intercontinental Exchange’s November Brent contract was trading at $91.50 per barrel, down 1.43per cent from the previous close. The West Texas Intermediate (WTI) October contract on the NYMEX also decreased 1.72per cent to $85.39 per barrel.

“As market participants evaluated OPEC’s output cut, NYMEX crude trades down near $85.5/bbl and has tested the lowest level since January. The oil producer group is already producing well below its target level, so the drop may not impact supply. It also portends a weaker forecast for demand, media reports. He added that negative risk sentiment and demand concerns might keep crude oil under pressure. Crude oil also declined as the recent recovery in European gas prices failed to last, a virus spread in top importer China, conflicting economic data from key nations, and demand concerns.

Given China’s significant oil imports, new COvid lockdowns appear to be the main cause of concern for crude demand. Oil prices are also being affected by the US dollar’s strength due to rising anticipation that the Federal Reserve will raise interest rates again.