SINGAPORE (Reuters) – Brent crude oil prices fell by $ 1 a barrel on Monday amid renewed concerns about global fuel demand amid harsh coronavirus blockages in Europe and new restrictions on movement in China, the second largest oil consumer in the world, where infections have grown.
In the long run, Brent crude oil fell 78 cents, or 1.4%, to $ 55.21 a barrel at 0758 GMT, after falling $ 1 to a session low of $ 54.99 earlier . Brent has grown in the last four sessions.
US West Texas Intermediate (WTI) fell 52 cents, or 1%, to $ 51.72 a barrel. The WTI rose to a one-year high on Friday.
“Covid hot spots broke out again in Asia, with 11 million people (in) blockades in China’s Hebei province … along with a drop of political uncertainty from the Fed, triggered a profit that knocked out the gates,” said Stephen Innes, head of global market strategist at Axi, said in a note.
Mainland China has seen the largest daily increase in virus infections in more than five months, authorities said Monday, as new infections grew in Hebei, which surrounds the capital, Beijing.
Shijiazhuang, the provincial capital and the epicenter of the new outbreak, is blocked, with people and vehicles forbidden to leave, while authorities try to limit the spread.
Most of Europe is now under the strictest restrictions, according to the Oxford Strictness Index, which tracks measures such as travel bans and the closure of schools and jobs.
“Brent is performing poorly after Crown Prince Mohammed bin Salman revealed Saudi Arabia’s future beyond oil and Iraq raised its prices for crude oil sales to Asia in February,” said Edward Moya, a senior market analyst at OANDA.
The Saudi Crown Prince on Sunday unveiled plans to build a zero-carbon city at NEOM, the first major construction project for the $ 500 billion iconic commercial area aimed at diversifying the economy of the world’s largest oil exporter.
However, oil price losses have been limited by plans for US President-elect Joe Biden to announce trillions of dollars in new virus-free bills this week, much to be financed by increased lending.
Crude oil prices were backed by Saudi Arabia’s commitment last week to a voluntary reduction in oil production of 1 million barrels per day (bpd) in February and March, as part of an agreement for most OPEC + producers to keep production constant. during new blockages.
Reporting by Jessica Jaganathan; Edited by Christian Schmollinger and Clarence Fernandez