Brent crude fell 3.3 percent, or $3.08, on Thursday to settle at $89.78 a barrel on rising COVID-19 cases in China and fears of more aggressive interest rate hikes.
In addition, the price of US West Texas Intermediate (WTI) crude fell 4.6 percent, or $3.95, to settle at $81.64 a barrel, as China, the world’s largest oil importer, reported a daily increase in COVID-19 infections.
It reported 23,276 new COVID-19 infections on November 16, of which 2,388 were symptomatic and 20,888 asymptomatic, the National Health Commission said on Thursday.
That compares with 20,199 new cases the day before: 1,623 symptomatic infections and 18,576 asymptomatic ones, which China counts separately.
Excluding imported infections, China reported 23,132 new local cases, of which 2,328 were symptomatic and 20,804 asymptomatic, up from 20,059 the previous day.
Looking at the reality on the ground, Chinese refiners have asked to reduce the volume of Saudi crude in December.
Following its stiff COVID brakes, average refining rates at state refiners fell to around 70% between May and August.
The market was affected by indications that interest rates will continue to rise here in the US.
New comments from St Louis Fed President James Bullard said a basic monetary policy rule would require interest rates to rise by at least about 5 percent, while tighter assumptions would recommend rates above 7 percent. .
The dollar also rose as investors digested US economic data. A stronger dollar makes dollar-denominated oil more expensive for holders of other currencies.
Geopolitical tensions eased after Poland and the North Atlantic Treaty Organization (NATO) said a missile that crashed inside the country was likely a stray shot from Ukraine’s air defenses and not a Russian attack.
Oil got support from official figures showing that US crude stocks fell 5 million barrels more than expected in the past week.
Supply is also tightening in November as the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, implement their latest production controls to support the market.
The International Energy Agency (IEA) this week projected demand growth to slow to 1.6 million barrels per day in 2023 from 2.1 million barrels per day this year.