Oil Falls As Investors Engage In Profit Taking Over Sinking China Demand

Oil prices fell on Monday, Oct. 10, 2022, snapping five days of gains, as investors took profits after a report on slowing economic activity in China, the world's biggest crude importer, re-ignited concerns about falling global fuel demand, Florence Tan and Emily Chow reported for Reuters.

Photo Insert: Brent crude futures for December settlement fell by as much as 1.1%, and was last down 85 cents, or 0.9%, at $97.07 a barrel by 0500 GMT.

Brent crude futures for December settlement fell by as much as 1.1%, and was last down 85 cents, or 0.9%, at $97.07 a barrel by 0500 GMT. West Texas Intermediate crude for November delivery declined by as much as 1.1% and was at $91.84 a barrel, down 80 cents, or 0.9%.

Services activity in China during September contracted for the first time in four months as COVID-19 restrictions hit demand and business confidence, data showed on Saturday.

The slowdown in the economy of China, the world's second-largest oil consumer after the US, adds to growing concerns about a possible global recession triggered by numerous central banks raising interest rates to combat high inflation rates.

"Oil ... is getting hit with the triple whammy of China's economic weakness, U.S. monetary policy tightening and Biden administration SPR intervention," Stephen Innes, managing director at SPI Asset Management, said in a note.

Innes was referring to the possibility of additional releases from the US Strategic Petroleum Reserve next month in response to the decision last week by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, to lower their output target by 2 million barrels per day.

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