NEW YORK (Pakistan Point News / Sputnik - 02nd September, 2022) Oil prices fell for a third day in a row on Thursday after new lockdowns in China over coronavirus concerns sent US crude to January lows of almost $85 a barrel.
Brent crude, the London-traded global benchmark for oil, settled down $3.28, or 3.4%, at $92.36 per barrel, after a session low at $92.13. Brent fell 2.8% on Wednesday and 5% on Tuesday.
New York-traded West Texas Intermediate (WTI), the benchmark for US crude, settled down $2.94, or 3.3%, at $86.61. It fell 2.3% on Wednesday and 5.5% on Tuesday.
Thursday's session low in WTI was $86, just $1 from snapping the $85 support.
"From a technical perspective, a break below $85 could make WTI test the monthly middle Bollinger Band of $82," Sunil Kumar Dixit, chief technical strategist at SKCharting.com, said. "If that snaps, it could go all the way down for a test of $77.98 in the short term, before any fresh rebound takes it toward the $97-$99 resistance zone. That again is from a technical perspective. From a more comprehensive outlook on oil, you have to consider the fundamentals too, of course."
Oil's fundamentals looked cloudy at best as Asia's factory activity slumped in August amid China's zero-COVID-19 curbs and cost pressures continued to hurt businesses, darkening the outlook for the region's fragile recovery, according to reports.
Southern Chinese tech hub Shenzhen, meanwhile, tightened COVID-19 curbs as cases continued to mount, with large events and indoor entertainment suspended for three days in the city's most populous district, Baoan.
Also pressuring oil this week was the White House's announcement that President Joe Biden spoke with Israeli Prime Minister Yair Lapid on Wednesday on reviving the 2015 nuclear agreement that is sought by Iran and strongly opposed by Israel. At stake is the potential removal of US sanctions on Iranian oil that could add up to a million barrels per day more on the global exports market for crude.
Oil prices could fare better next week though when the oil producing alliance OPEC Plus - which combines the original 13 members of the Saudi-led Organization of the Petroleum Exporting Countries and with ten allies led by Russia - holds its monthly meeting.
