Oil falls on China's COVID-19 cases, high crude build

By Laura Sanicola NEW YORK (Reuters) - Oil prices fell on Friday, weighed down by a build in U.S. crude inventories and worries that new pandemic restrictions in China will curb fuel demand in the world's biggest oil importer

Reuters January 23, 2021 00:07:05 IST
Oil falls on China's COVID-19 cases, high crude build

Oil falls on Chinas COVID19 cases high crude build

By Laura Sanicola

NEW YORK (Reuters) - Oil prices fell on Friday, weighed down by a build in U.S. crude inventories and worries that new pandemic restrictions in China will curb fuel demand in the world's biggest oil importer.

Brent crude futures declined 60 cents, or 1.1%, to $55.50 a barrel by 11:58 EDT (1658 GMT).

U.S. West Texas Intermediate (WTI) crude futures fell 68 cents, or 1.3%, to $52.45.

Overall U.S. crude inventories surprisingly rose by 4.4 million barrels in the most recent week, versus expectations for a draw of 1.2 million barrels.

Recovering fuel demand in China underpinned market gains late last year while the United States and Europe lagged, but that source of support is fading as a fresh wave of COVID-19 cases has sparked new restrictions.

Travel on U.S. roads fell 11% in November, a steeper decline over October road use as coronavirus cases increased, the U.S. Transportation Department said Friday.

"The pandemic seems to continue to expand into a second wave in China, with infections rising by the day and reaching again different regions such as Shanghai," said Rystad Energy oil markets analyst Louise Dickson.

U.S. crude inventory data showed signs of strength in domestic product demand.

While U.S. crude oil stockpiles rose unexpectedly last week, refineries hiked output to their highest capacity usage since March and demand for gasoline and diesel increased week on week.

"Crude oil exports did fall quite dramatically, which is the main reason for a decent build overall in crude stocks,” said Tony Headrick, energy market analyst at CHS Hedging.

(Additional reporting by Noah Browning in London, Sonali Paul in Melbourne and Koustav Samanta in Singapore; Editing by Louise Heavens and Mark Heinrich)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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