Oil dropped at the start of the week below $100 as worry over a spreading Covid-19 outbreak in China might impact consumption even further, according to Bloomberg.
The market continues to be defined by volatility as the Russian invasion of Ukraine, an uncertain Covid-19 situation in China, and a recovering global economy all continue to push and pull on oil’s price. Oil’s price has ranged from a low of $60.30 to a high of $134.91 over the last year on Brent.
The international benchmark Brent crude fell 4.6% to $101.74 a barrel at 4:34 a.m. ET; the U.S. crude West Texas Intermediate fell 4.9% to $97.07.
Still, oil is roughly $45 a barrel higher today than it was a year ago, translating to a boon for Saudi Arabia’s economy and stock market. The International Monetary Fund raised its estimate for Saudi Arabia’s GDP growth by nearly three percentage points to 7.6% for 2022, and the Tadawul is the sixth best-performing gauge globally in 2022.
Potential demand destruction from China lockdowns “is the number one issue in the market right now,” Bob Yawger, director of the futures division at Mizuho Securities USA, told Bloomberg.
China has implemented lockdowns in a number of cities as it pursues a Covid Zero strategy.
