Oil falls as slowdown concerns weigh on Opec-driven gains

Bloomberg

Oil slumped as concerns over a global slowdown and weaker demand vied with a tightening supply outlook after Opec+ cut output.
West Texas Intermediate traded near $90 a barrel, after earlier falling as much as 2.9%. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the US and global economies are likely to sink into recession next year, while the International Monetary Fund and World Bank saw rising risks of a slowdown.
Oil falls to its the lowest level since January last month as slowdown concerns gathered force, only to rebound after the Organisation of Petroleum Exporting Countries and its allies responded by reducing output. Investors are gauging the impact of higher interest rates as central banks including the Federal Reserve fight inflation, as well as disruptions caused by the war in Ukraine and the outlook for global supply heading into the northern-hemisphere winter.
“Crude oil trades lower on renewed demand concerns,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Last week’s Opec driven price jump faded further overnight with the risk sentiment once again souring across markets on worries the global economy, including the US, will face a very challenging 2023.”
In China, the world’s largest crude importer, authorities are signaling that there’ll be no let-up in the nation’s Covid Zero policy, potentially acting as a brake on energy demand. The approach is sustainable and the country must stick to it as it is key to stabilising the economy and protecting lives, the Communist Party’s flagship newspaper said in a commentary Tuesday.
Putin Says OPEC+ Output Moves are Not Targeted Against Anyone
Decisions of the Opec+ are designed to stabilize global energy markets and are not targeted against anyone, Russian President Vladimir Putin insisted.
The Opec+ cuts in force from November come as Russia’s invasion of Ukraine threatens energy supplies in the run-up to the winter peak demand season, prompting Western officials to accuse the Kremlin of weaponising its natural resources.