Oil dives 3%, trade choppy on worries about China, global economy
Shafaq News / Oil prices tumbled 3% in volatile trade on Tuesday, pressured by weak demand data from China, a gloomy economic outlook and a stronger U.S. dollar.
Brent futures for March delivery fell $2.73, or 3.2%, to $83.18 a barrel by 1:16 p.m. ET (18:16 GMT). U.S. crude fell $2.46 to $77.80 per barrel, a 3.1% loss.
Both benchmarks rose $1 a barrel early in the session, then reversed course, headed for their largest daily decline in nearly a month.
"There is plenty of reason for concerns here - the China COVID-19 situation and the fear of recession in the foreseeable future is putting pressure on markets," Mizuho analyst Robert Yawger said.
The Chinese government has raised export quotas for refined oil products in the first batch for 2023. Traders attributed the increase to expectations of poor domestic demand as the world's largest crude importer continues to battle waves of infections.
Another worry: China's factory activity shrank in December as surging infections disrupted production and weighed on demand after Beijing largely removed anti-virus curbs.
Adding to the gloomy economic outlook, IMF Managing Director Kristalina Georgieva on Sunday said the economies of the United States, Europe and China, the main engines of global growth, were all slowing simultaneously, making 2023 tougher than 2022 for the global economy.