Crude oil plunged 4%
The economic outlook is bleak
The US dollar is stronger
Oil prices plunged sharply in a volatile trading session at the opening of 2023 trading, weighed down by a gloomy demand and economic outlook and a stronger US dollar.
Rising Covid cases and death tolls in China are weighing on short-term demand expectations in the world's top crude oil importer even as sanctions have been lifted.
More countries around the world are introducing new control measures to curb the spread of the epidemic from the country, giving the impression that the recovery in fuel demand will not recover quickly.
At the same time, fears of a recession continue to plague the market especially after the warning from the International Monetary Fund (IMF) that the world's 3 main economies are experiencing slow activity.
Looking at the movement of crude oil prices in the Asian session, US WTI futures traded weak at $76 a barrel after losing 4.1% in the trading session on Tuesday.
Meanwhile, Brent oil trading was gloomy at $82 a barrel following the 4.4% loss recorded earlier.
Also putting pressure on prices was the trading of the US dollar which showed a drastic jump on Tuesday, thus affecting oil demand as dollar-denominated commodities became more expensive for holders of other currencies.
