SINGAPORE (Reuters) – Oil prices fell for a second day on Thursday, as surging coronavirus cases around the world raised concerns about demand, although U.S. crude inventories fell for a fifth week back-to-back and robust data from China capped losses.
Brent crude oil futures fell 18 cents, or 0.3%, to $ 55.88 a barrel at 4:25 a.m. GMT, while US West Texas Intermediate (WTI) slipped 11 cents, or 0.2%, at $ 52.80 a barrel.
“The scorching rally in the oil market has likely come to a halt as the stronger dollar and the overhang of the ubiquitous gasoline supply offset the evaporation of US crude inventories,” said Stephen Innes, chief market strategist. worldwide at Axi.
Last week, U.S. crude oil inventories fell more than expected, while gasoline and distillate inventories rose as refiners increased production to their highest level since August, Energy said on Wednesday. Information Administration.
China, the world’s second-largest oil consumer, reported its largest daily increase in new COVID-19 cases in more than 10 months, with infections in northeastern Heilongjiang province nearly tripling, highlighting the growing threat as a major national holiday approaches.
Governments across Europe on Wednesday announced tighter and longer lockdowns against coronaviruses due to a rapidly spreading variant of COVID first detected in Britain and vaccinations are unlikely to help much before two to three 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).
China’s total crude oil imports jumped 7.3% in 2020 despite the coronavirus shock earlier in the year, with record arrivals in the second and third quarters as refineries expand and prices low encouraged stocks, customs data showed Thursday.
A major COVID-19 relief package, which US President-elect Joe Biden is due to unveil on Thursday, has also helped control losses.
“Data on China continues to outperform and a monstrous US stimulus package appears to be underway,” said Jeffrey Halley, senior market analyst at OANDA.
“Both should ensure that many physical buyers will appear when prices drop, thus limiting losses.
Reporting by Jessica Jaganathan; edited by Richard Pullin