SINGAPORE (Reuters) – Oil prices fell on Monday amid renewed concerns about global fuel demand amid tight coronavirus blockades in Europe and new restrictions on movement in China, the world’s second-largest oil user. world, after a leap in cases.
Brent crude futures fell 42 cents, or 0.8%, to $ 55.57 a barrel at 0146 GMT after previously climbing to $ 56.39, the highest since May 25. February 2020. Brent increased in the previous four sessions.
The US West Texas Intermediate (WTI) fell 22 cents, or 0.4%, to $ 52.02 a barrel. On Friday the WTI peaked in almost a year.
“Covid hotspots are re-emerging in Asia, with eleven million people (in) locked up in Hebei province in China … along with a touch of political uncertainty Fed has brought some benefits out the doors this morning ”said Stephen Innes, Axi’s world market chief strategist, said in a note Monday.
Mainland China saw its largest daily increase in COVID-19 cases in more than five months, the country’s national health authority said Monday, while new infections in Hebei province, which surrounds the capital Beijing, they continued to increase.
Shijiazhuang, the capital of Hebei and the epicenter of the new outbreak in the province, is closed with people and vehicles banned from leaving the city as authorities move to curb the spread of the disease.
According to the Oxford Stiffness Index, most of Europe is now under stricter restrictions, assessing indicators such as travel bans and the closure of schools and jobs.
Still, oil price losses slowed with plans for U.S. President-elect Joe Biden to announce billions of dollars in new coronavirus relief bills this week, much of which will be paid for with the increase in loans.
Crude oil prices continued to be supported by Saudi Arabia’s pledge last week for a voluntary reduction in oil production of 1 million barrels a day (bpd) in February and March as part of an agreement under which most OPEC + producers will maintain stable production during the new closures.
“Oil is still priced with great optimism related to the launch of Covid-19 vaccines,” Innes said.
“Demand will always improve as vaccines develop and supply is controlled thanks to the continued efforts of OPEC + and Saudi Arabia.”
Report by Jessica Jaganathan; Edited by Christian Schmollinger