SINGAPORE (Reuters) – Brent crude oil prices fell by $ 1 a barrel on Monday, plagued by renewed concerns about global fuel demand amid difficult coronavirus shutdowns in Europe and new borders for movement in China, the world’s second largest oil consumer, where infections have jumped.
The futures contract for Brent crude 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 has risen in the previous four sessions.
US West Texas Intermediate (WTI) dropped 52 cents, or 1%, to $ 51.72 a barrel. WTI rose to its highest level in almost a year on Friday.
“Covid hot spots flare up again in Asia, with 11 million people (in) locks in Hebei Province in China … coupled with a touch of Fed policy uncertainty, has led to some profit taking away the gates, “has Stephen Innes, world market leader. strategist at Axi, said in a note.
China has seen the largest increase in viral infections in more than five months daily, authorities said on Monday as new infections increased in Hebei, the capital of Beijing.
Shijiazhuang, the provincial capital and center of the new outbreak, is in a deadlock, with people and vehicles not allowed to leave because the authorities want to curb the spread.
Most of Europe is now under the strictest restrictions, according to the Oxford Index of Strictness, which follows measures such as travel bans and closure of schools and workplaces.
“Brent is performing well after Crown Prince Mohammed bin Salman unveiled the future of Saudi Arabia without oil and Iraq raised its prices for crude sales to Asia in February,” said Edward Moya, a senior market analyst at OANDA.
The Saudi Crown Prince on Sunday announced plans to build a carbon-free city at NEOM, the first major $ 500 billion flagship construction project aimed at boosting the world’s largest oil exporter economy diversify.
The oil price losses are still limited by the plans for US President Joe Biden to announce trillions of dollars in new virus relief bills this week. It is heavily funded by increased loans.
Crude prices were backed last week by Saudi Arabia’s promise of a voluntary reduction of 1 million barrels per day (bpd) in February and March as part of an agreement for most OPEC + producers to keep production stable during new closures.
Reported by Jessica Jaganathan; Edited by Christian Schmollinger and Clarence Fernandez