Oil Sinks on Chinese Demand Fears; US stocks boosted by talks with Ukraine

NEW YORK (Reuters) – Global oil prices plunged on Monday on concerns over China’s energy demand amid the latest Covid-19 surge, while Wall Street stocks rallied on raised hopes by the peace talks in Ukraine.
US benchmark oil West Texas Intermediate and European crude London Brent both fell more than 6% in value.
Millions of people in China’s financial hub have been confined to their homes as the eastern half of Shanghai has been put on lockdown to curb the country’s largest ongoing Covid-19 outbreak.
Authorities are imposing a two-phase lockdown on the city of around 25 million people to carry out mass testing.
Robbie Fraser, an analyst at Schneider Electric, called the hit to Chinese demand a “significant” risk for oil markets, which are already struggling with high crude prices.
The decline in oil prices has largely supported global equity markets, which have seen waves of selling this year on concerns about inflation.
Wall Street had another strong session, with the tech-heavy Nasdaq Composite Index adding 1.3%.
Ukrainian President Volodymyr Zelensky said kyiv negotiators were considering a Russian request for Ukrainian neutrality. The comments preceded further face-to-face talks between the two countries, which are expected to begin in Turkey on Tuesday.
“Markets have been battered by strong headwinds as investors continue to grapple with the ultimate impact of the war in Ukraine and uncertainty over the Fed’s aggressiveness in trying to reduce lingering inflationary pressures” , investment bank Charles Schwab said in a note.
In the currency markets, the Japanese yen fell to its lowest level since 2015 as the Bank of Japan announced plans for further purchases of 10-year government bonds.
The move comes as the Federal Reserve and other central banks are tightening monetary policy.
“Japan’s decision to keep yields low to support the world’s third-largest economy contrasts sharply with the Fed, which has hinted at larger rate hikes to control inflation,” said Western Union Business analyst Joe Manimbo. Solutions.
Among individual companies, Tesla jumped 8.0% as the electric carmaker announced plans to split its shares.

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