Oil Sheds Near 10% in Two Days Amid China’s Complicated Recovery
- Deepening front-month contango reflects sour near-term outlook
- China faces deluge of Covid deaths during Lunar New Year
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Oil’s losses deepened, with thin liquidity exacerbating sharp swings, as China’s mounting death toll overshadowed the country’s resolve to boost its economy.
West Texas Intermediate fell 5.3% to settle below $73, with crude dropping 9.5% in the past two sessions. China’s unwinding of its Covid Zero policy is expected to eventually resuscitate demand in one of the world’s biggest energy importers. However, the explosion in infections has extended the timeline for recovery. Deepening contango in front-month oil spreads reflects the dour near-term view.