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Oil Dragged Lower by Risk-Off Mood and Rising China Covid Cases

  • Supply concerns ease with CPC operational, SPR tender awarded
  • US President Biden scheduled to visit Saudi Arabia this week
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WATCH: Shanghai reported its first case of the BA.5 sub-variant. Emma O’Brien reports.Source: Bloomberg
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Oil declined as a renewed increase in China’s virus cases fed into weakness across global markets and the US awarded more crude from its reserves.

West Texas Intermediate crude futures slipped to settle at $104.09 a barrel. Earlier in the session, prices dropped as much as 3.9% as Covid cases continued to climb in Shanghai, posing a challenge to the oil-consuming country’s Covid Zero strategy. On the supply side, concerns eased after a court order allowed the crucial CPC terminal on Russia’s Black Sea coast to stay operational. Meanwhile in the US, the Department of Energy awarded almost 39 million barrels of crude from the Strategic Petroleum Reserve to 14 companies.