Oil extends losses to 2022 lows on Chinese demand concerns

Oil prices fell in European trade for a second session to 2022 lows on mounting concerns about Chinese demand as protests spread across the country against strict Covid 19 restrictions. 

The steep decline comes amid a state of uncertainty around the price ceiling for European crude as EU countries disagree on such  a ceiling. 

Global Prices

US crude fell 3.9% to $73.53 a barrel, the lowest since December 2021, while Brent dipped over 3.1% to $80.76 a barrel, the lowest since January 2022. 

US crude lost 1.8% on Friday, while Brent declined 1.4% on Chinese demand concerns. 

Oil prices lost on averages 4.5% last week, the third weekly loss in a row after falsified reports that OPEC+ might increase output. 

Chinese Demand

China faced spreading protests in multiple cities including Shanghai, following a deadly fire in the far west of the country.

Chinese authorities sought to make the restrictions more specified and less stringent, paving the way for potentially a reopening of the economy, however as infections rose, it reverted to strict regulations. 

As Covid 19 infections rise in the country, the government is holding onto its zero Covid 19 policies, casting shadows over fuel demand in the world's largest oil importer.

Price Ceilings

EU countries continue their discussions on putting a price ceiling on Russian crude, with negotiations expected to resume today.

The executive branch of the EU suggested putting the ceiling at $65, with Poland and the Baltic countries considering it too generous.

Other countries with large shipping industries like Greece and Malta refused to push prices below $70, which was the upper limit imposed by the EU earlier this week.