WTI sits near fresh daily lows as recession fears dig in

West Texas Intermediate (WTI ) crude fell to the lowest in nearly a year on Wednesday despite the good news in China's steps to move down from the zero-Covid policies. Instead, analysts fret over a weakening economic backdrop and low liquidity across markets. At the time of writing, Oil is down some 2.8%, sliding from a high of $75.36 to a low of $71.77. 

China has moved to relax the zero-Covid policies that had slashed economic growth and oil demand. However, the nation announced that frequent testing and health passes will no longer be needed for travel in the country. The easing of restrictions would be expected to aid recovery in the economy o the country is the world's No.1 oil importer. Additionally, a European Union embargo against maritime shipments of crude oil from Russia went into effect Monday, along with a price cap agreed to by the Group of Seven leading industrialized economies and Australia.

However, ahead of the Federal Reserve that looks to raise interest rates again when its policy committee meets next week, prospects of a recession in the US are weighing on Oil. 

''Despite European sanctions on Russian oil beginning this week, the market has refocused on the economic backdrop amid tighter monetary policies from central banks,'' analysts at ANZ Bank said. 

''The relatively high price cap also eased concerns of additional supply disruptions to Russian crude oil. Recent softness in the physical markets has also weighed on futures. Distillate inventories in the US rose by more than 6mbbl last week, according to Energy Information Administration data.''