Brent crude oil futures fell 42 cents to $ 55.64 a barrel at 1:18 p.m. GMT, while U.S. West Texas Intermediate (WTI) fell 29 cents to $ 52.62.
Brent’s six-month pullback, according to which contracts for onward delivery are cheaper, fell to its lowest since Jan. 5, indicating easing bullish sentiment.
China, the world’s second-largest consumer of oil, reported its biggest daily rise in new COVID-19 cases in more than 10 months.
Governments across Europe have announced tighter and longer lockdowns against coronaviruses, vaccinations are not expected to have a significant impact in the coming months.
Oil producers face an unprecedented challenge of balancing supply and demand, as factors such as the pace and response to COVID-19 vaccines cloud the outlook, an official from the International Agency for Human Rights has said. energy (AIE).
Saudi Arabia, for example, is strangling oil supplies to some Asian buyers, refining and trade sources told Reuters.
“The Saudi cuts have been counted since last week, even a little more than what was reasonable under market conditions, and a price rationalization was late,” said oil market analyst Rystad Bjornar Tonhaugen.
“Seeing Covid-19 infections increase in China with the highest margins for a long time is alarming for the market and, combined with tight lockdowns underway in Europe, may affect oil demand much more than initially expected in the first quarter. ”
Despite the coronavirus shock, China’s total crude oil imports rose 7.3% in 2020, with record arrivals in the second and third quarters, as refineries expanding operations and low prices encouraging storage, have showed the customs data.
Also bottoming prices, U.S. crude oil inventories fell more than expected last week, although gasoline and distillate inventories rose as refiners ramped up production, the Energy Information Administration said.
Boosting hopes of increased demand for oil was a major U.S. COVID-19 relief program, which President-elect Joe Biden is due to unveil on Thursday.