Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Investors Business Daily
Investors Business Daily
Business
GILLIAN RICH

Oil Prices Fall From Triple-Digits On Sweeping Covid-19 Lockdowns In China

Oil prices fell below $100 per barrel Tuesday as Covid-19 cases surged in China, dampening demand expectations, even as Russia stepped up its bombardment of Kyiv.

China reported nearly 3,500 new daily Covid-19 cases on Sunday, spurring a lockdown of several major cities including the tech manufacturing hub of Shenzhen, home of Apple's top iPhone maker. Over 50 million people are under lockdown orders as the Chinese government continues to push its Covid-zero strategy.

Oil Prices Fall

The lockdowns have hit demand expectations, sending oil back nearly to where it was before Russia invaded Ukraine.

Global benchmark North Sea Brent fell 6.4% to $99.68 per barrel. West Texas Intermediate was down 6.3% to $96.54.

U.S. oil prices had surged to over $130 per barrel last week as the White House announced a ban on imports of Russian oil. European allies, who are highly dependent on Russian natural gas, are unlikely to join in on the ban.

But oil majors BP, Shell and Exxon Mobil have made their own decision to pull back from exposure to Russia, putting future development at risk.

The U.S. imports just over 400,000 barrels of oil per day from Russia, most of that a heavy sour grade of crude, according to the Energy Information Administration. To make up the difference, Administration is looking at similar oil from Venezuela as an alternative.

Chevron is reportedly readying to restart operating control of its joint ventures in Venezuela if the White House relaxes its sanctions, sources told Reuters late Monday.

Chevron shares were down 4.3% to 159.60 in premarket trading on the stock market today. Exxon fell 4.2% to 78.42. BP's U.S. listed shares dipped 0.9% and Shell edged 0.4% lower.

Russia Ramps Up Attacks

In Ukraine, Russian forces continued attacks on Kyiv early Tuesday. Nine humanitarian corridors had been opened to evacuate citizens, and with more than 2.6 million Ukrainians reportedly fleeing the country. Officials from Poland, Slovenia and the Czech Republic announced that they will travel to the capital to meet with Ukrainian leaders.

Talks between Russia and Ukraine ended Monday without a breakthrough in what Ukrainian President Volodymyr Zelenskyy called a "technical pause."

Follow Gillian Rich on Twitter at @GillianRich_ for energy news and more.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.