- Oil prices fall for the third consecutive day, reaching levels close to 87 dollars.
- Fears of a drop in demand from China are weighing on prices.
- US crude stocks rose above expectations last week.
WTI Crude Futures of the first month are depreciated for the third consecutive day on Wednesday. Concerns about a possible drop in demand from China, given the increase in COVID-19 infections, weigh on oil prices.
Benchmark US WTI is down around 1.3% on the day, reaching levels of $87.20 at time of writing, marking a nearly 7% selloff from the day’s high. Monday, at $93.70.
US Crude Oil Stockpiles Rise Above Expectations
A Reuters report, citing the American Petroleum Institute, states that US oil stocks rose by 5.6 million barrels in the week to November 4, well above the 1.4 million barrel rise barrels expected by the market, which has added negative pressure on crude oil.
Investors remain wary of further lockdowns in China, after the country’s authorities reiterated their commitment to a “Zero COVID” policy over the weekend. With coronavirus infections on the rise with the winter flu season just around the corner, a new set of restrictions is expected to curb global oil demand in the coming months.
On the other hand, the US dollar stabilized on Wednesday, after having depreciated sharply in the last three days, which has contributed to the drop in WTI. The dollar index, which measures the value of the dollar against a basket of the most traded currencies, has risen to around 110.00 after bouncing from 109.30, its lowest level since mid-September.
Technical levels to watch
Source: Fx Street
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