As investors become more concerned that China would be removing some COVID-19 regulations, the price of oil has fallen today. Investors are concerned that this may cause a fresh wave of infections.
While US crude is down 1.9% at 77.48 per barrel, Brent crude has lost 1.5% of its value today to $81.93 per barrel.
Oil Price Has Been Affected By COVID-19 Pandemic
The world’s largest crude oil importer’s prospects of a resurgence in fuel demand have been dashed by an increase in COVID-19 cases in China.
Oil prices and market prices have been affected by the announcement that the US is now mandating negative COVID-19 testing for airline passengers flying from China, while Italy is requiring tests as a condition of travel.
As the nation eventually abandoned its zero-Covid strategy, China’s decision to drop the necessity for tourists to undergo quarantine earlier this week had bolstered sentiment.
Furthermore, since limits were lifted, the nation’s healthcare system has been under a lot of strain. However, JP Morgan strategists predict that over the Lunar New Year vacation next month, there would be a likely infection peak, followed by a cycle upturn.
Read more: China COVID-19 surge prompts new dilemma for health workers
China’s Economy
Even while the present increase in infections is causing worries, Thomas Hayes, head of Great Hill Capital LLC in New York, believes that the reopening of the second-largest economy in the world will ultimately benefit the US economy.
People are skeptical since China’s past two years have been such a disaster because of how quickly they have changed their stance, according to Hayes.
But according to Amit Sinha, head of the multi-asset strategy at Voya Investment Management, noise such as poor liquidity and so-called tax loss harvesting, where investors sell underperforming investments, is to blame for Tuesday’s stock falls.
Read more: Taiwan extends mandatory military service after China sends 71 warplanes near border
