Oil rigs are seen at Vaca Muerta shale oil and gas drilling in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS/Agustin Marcarian/File Photo
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- Mass COVID testing for Beijing’s Chaoyang District
- US inflation data increases fears of further large interest rate hikes
- Unrest cuts Libyan oil production in half
LONDON, June 13 (Reuters) – Oil fell more than $2 on Monday as a flare-up in Beijing’s COVID-19 cases dashed hopes of a revival in Chinese demand, while worries about further rate hikes to control rampant inflation added more Print.
Beijing’s most populous district, Chaoyang, announced three rounds of mass testing to quell a “rampant” COVID-19 outbreak. Continue reading
Concerns over further rate hikes, fueled by Friday’s US inflation data, weighed on financial markets.
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Brent crude was down $2.34, or 1.9%, to $119.67 by 0815 GMT, while US West Texas Intermediate crude was down $2.36, or 2%, to $118.31.
“The current price slide is compounded by warnings from officials of a ‘rampant’ spread of the COVID virus in Beijing, raising doubts about an immediate recovery in demand,” said Tamas Varga of oil brokerage PVM.
Oil has surged in 2022 as Russia’s invasion of Ukraine heightened supply concerns and oil demand rebounded from COVID lockdowns. Brent hit $139 in March, its highest level since 2008, and both oil benchmarks rose more than 1% last week.
Supply remains tight as OPEC and its allies are unable to fully meet promised production increases due to a lack of capacity at many producers, sanctions against Russia and unrest in Libya that has roughly halved production. Continue reading .
“Supply and demand dynamics continue to support prices,” said Jeffery Halley of brokerage firm OANDA, who believes a prolonged oil sell-off is unlikely “unless US markets move into a full-blown recession on price.”
Stocks fell in Asia and posted early losses in Europe as Friday’s data showed the US CPI rose 8.6% over the past month, continuing to weigh on financial markets.
The data put markets on alert that the US Federal Reserve could tighten monetary policy for too long and cause a sharp economic slowdown. The Fed’s next monetary policy decision is due on Wednesday.
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Additional reporting by Florence Tan and Mohi Narayan Editing by Mark Potter
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