Brent oil is trading close to its late-September lows, after briefly dipping to its lowest since January at the onset of the trading week.
Market participants are also turning less bullish on oil, with price patterns flashing bearish signals.
Given China’s role as the world’s biggest importer, ongoing Covid-Zero measures amidst record daily infections are crimping demand for the commodity in the world’s second largest economy.
Demand-side fears are now clearly in the driver’s seat for determining oil prices.
As long as global recession woes continue to grip market sentiment, OPEC+ supply cuts may just offer a supportive role for oil benchmarks, as opposed to major catalysts for surging prices.