Oil dips as China Covid spike dampens demand outlook

Oil prices dipped on Thursday as surging Covid-19 cases in China dimmed hopes of a recovery in fuel demand for the world's largest crude oil importer. Brent futures for February fell 26 cents, or 0.3 per cent, to $83.00 a barrel by 0430 GMT, while US crude fell 26 cents, or 0.3pc, to $78.70 a barrel. The scale of the latest outbreak and doubts over official data prompted some countries to enact new travel rules on Chinese visitors, even as China began dismantling the world's strictest Covid regime of lockdowns and testing. “The lack of clarity over the virus situation in China has prompted some new travel rules from various countries, which could serve as some dampener for previous optimism,” said Jun Rong Yeap, market strategist at IG. “Heading into 2023, there are chances for oil prices to rebound but it will still boil down to the pace of China's reopening, and whether market participants have priced for the growth risks as a trade-off to tighter central bank policies,” he added.