Crude Oil Lower; Chinese Covid Cases Weigh

• Crude oil prices slipped lower Tuesday, falling below $70 a barrel on fears that rising Covid cases in China would stunt growth in the second-largest oil consumer in the world. U.S. crude futures traded 2.3% lower at $69.61 a barrel, falling beneath $70 for the first time in two weeks, while the Brent contract fell 1.9% to $71.50. 
• China had largely managed to control the COVID-19 virus since the initial outbreak, helping to underpin a strong economic recovery from the pandemic, greatly contributing to the broader rebound in oil.
• However, it is now implementing a wave of travel restrictions and quarantine orders at a level not seen since the initial outbreak. Wuhan, where the virus was first reported in 2019, reported three new locally transmitted cases on Monday after more than a year, prompting the authorities to test the city’s 12 million residents amid fears the delta variant of the virus will quickly take hold. 
• China's factory activity growth had already slipped sharply in July, with the Caixin/Markit Manufacturing Purchasing Managers' Index falling on Monday to the lowest level since April 2020. This may be an indication of a slowdown that could impact the country’s oil demand.

(Source: Investing.com and NCBCM Research)