Oil prices fell on Tuesday as China’s capital Beijing expanded its COVID mass testing, heightening demand concerns and outweighing the prospect of supply disruptions.
Brent crude futures were down 56 cents, at $101.76 a barrel while U.S. West Texas Intermediate contracts were down 82 cents, at $97.72 per barrel.
China’s capital Beijing has expanded its COVID-19 mass testing from one district this week to most of the city of nearly 22 million, as the population braced for an imminent lockdown similar to Shanghai’s stringent curbs. China is the world’s largest crude oil importer.
Both oil contracts rose over $1 a barrel earlier in the session following a statement from the People’s Bank of China that it will step up monetary policy support to the real economy.
The prospect of supply tightness in the physical market related to the phasing out of Russian oil capped the fall in prices.
The parliamentary parties of Germany’s ruling coalition have called on the government to push ahead with a plan to phase out Russian oil and gas imports “as soon as possible”.
But analysts said that the release of oil from emergency reserves has eased concerns of tight supply.