Although China’s weeklong Lunar New Year holiday is expected to boost country’s oil demand, possible rise in COVID-19 cases fuel fears for renewed restrictions
Oil prices fell on Tuesday over economic recession fears ahead of an expected interest rate hike by the US Federal Reserve, putting a hold on hopes for an imminent economic recovery.
International benchmark Brent crude traded at $87.94 per barrel at 0726GMT, a 0.28% decrease from the closing price of $88.19 a barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at $81.52 per barrel at the same time, a 0.12% loss after the previous session closed at $81.62 a barrel.
Amid comments by Fed policymakers signaling an interest rate over 5%, both benchmarks posted slight decreases over weak demand concerns in the US, the world’s largest oil consuming country.
The market expectation is a policy rate hike by 25 basis points during Fed’s meeting on Feb. 1.
Meanwhile, hopes for a strong demand in China support upward price movements as country expects about 2.1 billion domestic journeys to be made over a 40-day travel season that includes the weeklong Lunar New Year holidays which started on Saturday.
However, such a massive influx of people also sparks fears that number of cases would rise again to provoke China’s strict “zero-COVID policy.”
