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00:00Then just take it away. It was. These numbers came out and people are already nervous about what the lockdowns are doing to China. And this just sort of confirmed everyone's worst fears. Retail sales and industrial production are down much more than expected. China's massive fleet of coal power plants produce 12 percent less power in April than they did the year before. That's the biggest year on year jobs since December of 2008 after the financial crisis. And you know with lockdowns still persisting in Shanghai although hopefully not for much longer. And you know here in Beijing we're currently restricted to working from my hotel room. It's yeah. Know there's a lot of worry that it's not going to get better. And so you know there's a little bit of risk off right now in the markets as people are just a little bit concerned that maybe China doesn't bounce back from this as quickly as the government keeps saying they're going to. The thing is Dan we have the EU also meeting to talk about that perhaps a ban on Russian oil. How how is this likely to weigh on the oil market. This is the crazy thing. You know oil is trading at one hundred eleven dollars a barrel a little bit down right now. And if that surge has come as demand has weakened in China you know we can only imagine what prices would be like if China's economy were going full bore. But Germany is planning on getting rid of Russian oil from its economy by the end of this year which is just going to sort of further so supply chain issues in the way that energy is transported around the world. So if China is able to sort of rally its economy the next month or two as the government is confident it can. That's going to just add fuel to this really really tight oil market and could propel prices higher in the coming months as Europe tries to cut your Russian supplies and traders and try to balance things out by shifting barrels here and there to to keep the market balanced. While we're mulling over what all of that may mean Iran says that it needs to it will double its supplies. Might that counter any sort of I guess supply shortages out there. It would be nice if that would happen. I have to be perfectly honest. Iran's oil infrastructure has been sort of under utilized for the last couple of years now. And you know whether it's been well maintained and able to sort of ramp up production as quickly as the Iranian government is saying it will. That's a question that not a lot of oil analysts and traders have a ton of confidence in this equipment that it takes time to process oil and export. It is pretty complicated stuff. And if it's not operating all the time there's going to be big questions about whether they can ramp up fast enough to make up for a supply deficit that's going to be increasing pretty quickly. Again if China's economy is able to to ramp back up to to its pre pandemic levels.

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Oil Tumbles as Virus Lockdowns in China Pummel Economy

Oil tumbled for the first time in four sessions as Covid-19 lockdowns pummeled the economy of the world’s biggest crude importer. Bloomberg’s Dan Murtaugh reports on “Bloomberg Markets: Asia.” (Source: Bloomberg)

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