Daily Times

Crude oil prices dipped around 4 percent on Monday as lockdowns in China and some countries’ plans to release crude from their strategic stocks sparked demand fears.

As of 1430 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $3.82 (-3.72 percent) to reach 98.96 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, slipped to $94.54 a barrel, down by $3.72 (-3.85 percent).

The price for Opec basket was recorded at $101.02 a barrel with an increase of 0.90 percent. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.

Arab Light was available at $105.37 a barrel with a decrease of 0.20 percent and the price of Russian Sokol slipped to $91.76 a barrel with a 0.46 percent decrease.

According to experts, the spread of Covid in China is the most bearish item affecting the market. They said if Covid spreads throughout China resulting in a significant number of lockdowns, the impact on oil markets could be substantial. China is the world’s largest oil importer, and the Shanghai area consumes roughly 4 percent of the country’s crude.

Last week the International Energy Agency announced that its member countries would release 120 million barrels from emergency stockpiles, of which 60 million barrels would be from the US. The announcement followed the Biden administration saying it would release 180 million barrels from the Strategic Petroleum Reserve in an effort to alleviate soaring prices.

Oil prices have been on a roller-coaster ride since Russia invaded Ukraine. WTI briefly traded as high as $130.50 on March 7, the highest level since July 2008. The contract has fallen nearly 30pc since. Brent meantime spiked to $139.13 in March. Part of the move is thanks to fears over what a disruption in Russian supply would mean for an already tight market. The IEA previously predicted that three million barrels per day of Russian oil output was at risk.