Jan 4 Reuters Oil edged lower on Wednesday after slumping in the previous session, weighed down by concerns about weak demand due to the state of the global economy and China39;s rising COVID cases.

Brent futures for March delivery fell 43 cents to 81.67 a barrel, a 0.5 loss, by 0700 GMT. U.S. crude dropped 39 cents, or 0.5, to 76.54 per barrel.

Both benchmarks plunged more than 4 on Tuesday, with Brent suffering its biggest oneday loss in more than three months.

Warning signs of global recession, China39;s lacklustre recovery with surging COVID19 cases, renewed strength in the U.S. dollar and dampened risk sentiment are all catalysts keeping oil prices in check overnight, said Yeap Jun Rong, Market Analyst at IG, in a note.

The Chinese government also increased export quotas for refined oil products in the first batch for 2023, signalling expectations of poor domestic demand.

Top oil exporter Saudi Arabia may further cut the prices for its flagship Arab Light crude grade to Asia in February, after they were set at a 10month low for this month, as concerns of oversupply continued to cloud the market.

The market remains worried about the impact of macro factors such as the economic downward pressure, said analysts from Haitong Futures.

The head of the International Monetary Fund warned that much of the global economy would see a tough year in 2023 as the main engines of global growth the United States, Europe and China were all experience weakening activity….