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Oil prices fell sharply on Tuesday as the dollar rose amid fears of a global economic slowdown and restrictions imposed in China, the world’s biggest oil importer, to curb the spread of Covid-19.
By 1347 GMT, benchmark Brent crude was down $6.15, or 5.7 percent, at $100.95 a barrel, while US West Texas Intermediate crude was down $6.30, or 6.1 percent, at $97.79.
The euro fell on Tuesday, falling against the dollar, while stock markets fell on expectations of interest rate hikes and worries about economic conditions in various parts of the world.
A higher dollar generally affects oil prices because it makes dollar-denominated crude more expensive for holders of other currencies.
Many Chinese cities are implementing new restrictions to contain Covid-19, from closing some businesses to controlling new infections with the emergence of a new substrain (Omicron PA5.2.1) that is spreading rapidly.
US President Joe Biden will call on the Organization of the Petroleum Exporting Countries (OPEC) to increase production when he meets Gulf leaders in Saudi Arabia this week, White House National Security Adviser Jack Sullivan said on Monday.
Spare production capacity of the Organization of the Petroleum Exporting Countries (OPEC) member countries is declining as most producers pump their full capacity.
Western sanctions imposed on Russia over its war in Ukraine, which Moscow describes as a “special military operation”, have disrupted trade flows of crude oil and fuel.
OPEC expects global demand for oil to increase by 2.7 million barrels in 2023, a slightly slower rate than its rise in 2022, in light of the pandemic and better containment of global economic growth to support consumption.
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