Oil prices fall due to renewed coronavirus concerns as cases in China increase

SINGAPORE (Reuters) – Brent crude oil prices fell one dollar a barrel on Monday, fueled by renewed concerns over global fuel demand amid strong coronavirus blockages in Europe and new limits on movement in China, the second world oil user, where infections increased. .

Brent crude futures fell 78 cents, or 1.4%, to $ 55.21 a barrel at 0758 GMT, after falling $ 1 to a low of $ 54.99 earlier. Brent increased in the previous four sessions.

The Texas West Intermediate (WTI) of the US fell 52 cents, or 1%, to $ 51.72 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 China’s Hebei province … along with a touch of uncertainty in Fed policy, it has brought some benefits to the doors, “said Stephen Innes, chief market strategist at Axi, said in a note.

Mainland China saw its largest daily increase in virus infections in more than five months, authorities said Monday, as new infections rose in Hebei, which surrounds the capital, Beijing.

Shijiazhuang, the provincial capital and epicenter of the new outbreak, is closed, with people and vehicles banned from leaving as authorities try to curb the spread.

According to the Oxford Stiffness Index, most of Europe is now under stricter restrictions, which tracks measures such as travel bans and the closure of schools and jobs.

“Brent is performing lower than Crown Prince Mohammed bin Salman revealed Saudi Arabia’s future beyond oil and Iraq raised crude oil sales prices in Asia in February,” Edward Moya said , senior market analyst at OANDA.

The Saudi Crown Prince on Sunday unveiled plans to build a carbon-free city at NEOM, the first major $ 500 billion flagship commercial zone construction project aimed at diversifying the world’s major oil exporter economy.

Still, oil price losses slowed with plans for U.S. President-elect Joe Biden to announce $ 1 trillion in new virus relief bills this week, much to be financed by the increase in loans.

Crude oil prices were backed by a pledge from Saudi Arabia 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 for most OPEC + producers to keep production stable during the new closures.