WTI dips to $90 area concerns about China and US elections

• Oil price dips on renewed fears about Chinese demand.
• The US dollar's reversal has failed to support crude prices.
• WTI falls beyond 2% on the day to hit session lows near $90.00.

WTI prices have extended losses for the second consecutive day on Tuesday, as hopes about a relaxation of the COVID-19 restrictions in China faded, and the investors brace for the outcome of the US mid-term elections.

China confirms its Zero-COVID policy

Hopes that China was contemplating a relaxation on the coronavirus restrictions waned on Tuesday. The Chinese authorities confirmed their commitment to strict COVID-19 controls, which has reactivated fears of negative consequences in oil demand, as the infections increase as the winter flu season approaches.

Furthermore, the uncertainty about the outcome of the US mid-term elections has increased negative pressure on oil prices. Investors have adopted a wait-and-see stance, while the first polls point out to a Republican victory.

The dollar reversal witnessed during the North American trading session has failed to offer any relevant aid to oil futures. Crude prices have dropped more than 2% on the day, extending their reversal from Monday’s highs at 93.65 to session lows right above $90.00.

Technical levels to watch