Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil settles lower as China developer downgrades add to fears of demand outlook

CommoditiesDec 09, 2021 03:31PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Oil storage containers are seen, amid the coronavirus disease (COVID-19) pandemic, in Los Angeles, California, U.S., April 7, 2021. REUTERS/Lucy Nicholson/File Photo

By Laura Sanicola

(Reuters) -Oil prices settled lower on Thursday on fears about the economic outlook in the world's biggest oil importer following ratings downgrades to two Chinese property developers, and after some governments took measures to fight the Omicron variant of the coronavirus.

Brent crude futures settled down $1.40, or 1.9%, to $74.42 a barrel, backing off a session high of $76.70. U.S. West Texas Intermediate (WTI) crude futures were down $1.42, or 2%, at $70.94 after hitting a peak of $73.34.

On Thursday, ratings agency Fitch downgraded property developers China Evergrande Group and Kaisa Group to "restricted default" status, saying they had defaulted on offshore bonds, while a source said that Kaisa had started work on restructuring its $12 billion offshore debt.

The news "exacerbates the Chinese GDP growth fears and ultimately could impact the oil-buying appetite of the world's biggest crude customer," said Rystad Energy analyst Louise Dickson.

On Wednesday, British Prime Minister Boris Johnson imposed tougher COVID-19 restrictions in England, saying people should work from home where possible, wear masks in public places and show COVID-19 vaccine passes for entry to certain events and venues.

"Although laboratory tests showed that the Pfizer (NYSE:PFE) vaccine has a neutralising effect on Omicron ... new measures are being introduced to try to stop the spread of the virus," said Tamas Varga of oil brokerage PVM.

Denmark also plans new restrictions, including closure of restaurants, bars and schools, while China has halted group tourist trips from Guangdong.

South Korea has registered record infections while cases remain elevated in Singapore and Australia.

The number of Americans filing new claims for unemployment benefits dropped last week to the lowest level in more than 52 years amid an acute shortage of workers, according to new data published by the U.S. Labor Department.

"The oil market doesn't always respond well to good economic news either, because it could prompt the Federal Reserve to tighten monetary policy," said John Kilduff, partner at Again Capital LLC in New York.

Markets were buoyed by comments from BioNTech and Pfizer that a three-shot course of their COVID-19 vaccine could protect against infection from the Omicron variant.

The Omicron outbreak sparked a 16% slump in Brent prices from Nov. 25 to Dec. 1. More than half of the drop has been recouped this week, but analysts say a further recovery could be limited until Omicron's impact is clearer.

U.S. inventory data released on Wednesday also weighed on prices.

Energy Information Administration (EIA) data showed that crude inventories were down by 240,000 barrels last week, much less than analysts in a Reuters poll had expected, with stocks at the Cushing delivery hub in Oklahoma rising by 2.4 million barrels. [EIA/S]

Fuel stocks also rose by a combined 6.6 million barrels, the data showed.

Oil settles lower as China developer downgrades add to fears of demand outlook
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Nordin Mohamad
Nordin Mohamad Dec 09, 2021 3:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
debt default officially just started and since it has been indebted in big way likely it will end up badly in big way causing global crunch just like what happen in 2008 caused by subprime loan crisis in usa...
Jack Zydron
Jack Zydron Dec 09, 2021 8:45AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Mild cases, sore throats and headaches. Daily deaths at the lowest ever. have we lost our sanity. this will explode in next days. all in green!!!
perplexed76 .
perplexed76 . Dec 08, 2021 10:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
crude oil weekly production is up +200k last two weeks. "Analysts" keep angry silence
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email