WTI surrenders OPEC-inspired gains, drops below $78.00 as China’s Covid-19 cases soar

• Oil prices have surrendered their juggernaut recovery recorded after hitting a fresh 11-month low of $75.28.
• A significant rise in Covid-19 infections in China has escalated fears of a decline in oil demand.
• Nomura has lowered China's GDP growth forecast for 2022 and 2023 to 2.8% and 4.0% respectively.

West Texas Intermediate (WTI), futures on NYMEX, have sensed selling pressure after a weak rebound to near $78.00 in the early European session. On Wednesday, the oil prices witnessed a perpendicular downside move after failing to sustain above the critical hurdle of $81.00.

Earlier, the black gold witnessed a juggernaut recovery after printing a fresh 11-month low at $75.28. The firmer responsive buying action was propelled by escalating supply worries. Chatters over intervention by the OPEC+ in the oil market to support oil prices from its imbalanced movements got confirmed after Saudi Energy Minister said that the current OPEC+ deal will continue till the end of 2023.

According to the OPEC+ deal, the oil exporting countries agreed to cut production by two million barrels each day to boost oil prices. The street expected that the move is likely to disturb the current demand-supply mechanism, therefore, the oil prices were shaping themselves to turn efficient.

The recovery has been surrendered as Covid-19 infections have soared dramatically in China. It is reported that China's daily COVID cases rose to 29,754, the highest of the pandemic, so far. The easing norms by the Chinese administration are expected to be rolled back to curtail the spread.

China’s doctors have a blunt message for Xi Jinping: the country’s healthcare system is not prepared to deal with a huge nationwide coronavirus outbreak that will inevitably follow any easing of strict measures to contain Covid-19, as reported by Financial Times after it interviewed a dozen of health professionals.

Citing Covid-19 risks, Nomura has lowered China's GDP growth forecast for 2022 and 2023 to 2.8% and 4.0% respectively.