Oil prices slow as pandemic overshadows Chinese, US data

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In this news, we discuss the Oil prices slow as pandemic overshadows Chinese, US data

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LONDON (Reuters) – Oil prices fell on Thursday as bullish signals from Chinese import data and US crude oil inventory drawdowns were offset by soaring coronavirus cases in Europe and further lockdowns in China .

Brent crude oil futures fell 35 cents to $ 55.71 a barrel at 2:38 p.m. GMT, while US West Texas Intermediate (WTI) fell 12 cents to $ 52.79.

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 the oil supply to some Asian buyers, refining and trade sources told Reuters, while Russia plans to increase production this year, according to Russian media.

“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 demand for oil 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. [EIA/S]

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.

Reporting by Shadia Nasralla; Additional reporting by Jessica Jaganathan in SINGAPORE; Editing by David Goodman and Elaine Hardcastle

Original © Thomson Reuters

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