Oil Falls Most in a Month on New China Covid Scare, Dollar Surge



© Reuters.

By Barani Krishnan

Investing.com – Oil prices fell the most in a month on Friday, tumbling more than 2%, after concerns over Covid-19 lockdowns in top crude destination China hit a market that resisted for weeks worries about piling fuel stockpiles at home.

A resurgence in the , the currency on which oil trades, also made buying of the commodity less competitive for holders of the euro and other change — indirectly hitting demand for crude.

New York-traded , the key indicator for U.S. crude, settled down $1.21, or 2.2.%, at $52.36 per barrel. It was WTI’s biggest one-day slide since Dec. 18, although it rounded out the week with a 0.5% gain.

London-traded , the global benchmark for crude, settled down $1.32, or 2.3%, at $55.10. For the week, Brent lost 89 cents, or 1.6%.

China ramped up lockdowns on Friday after reporting the highest number of daily Covid-19 cases in more than 10 months. The world’s No. 2 economy capped a week that has resulted in more than 28 million people under lockdown as it suffered its first coronavirus death on the mainland since May.

“The Covid-19 pandemic’s spread is taking centre stage again and traders are getting increasingly worried about the long duration of European lockdown and about the new restrictions (in) China,” Bjornar Tonnage from Rystad Energy was quoted saying by Reuters. “The market is structurally bullish, but it may be getting too ahead of forward-looking fundamentals.”

In the United States, fuel products had been the oil complex’s weakest link for months. 

READ  Oil up on Virus Treatments; Storm Impact Limited Despite Shutdowns

stockpiles rose 4.395 million barrels during the first week of January, compared with expectations for a 2.69 million-barrel build, data from the U.S. Energy Information Administration said.

Stockpiles of , which include diesel and , rose by a more-than-expected 4.786 million barrels against expectations for a 2.67 million-barrel increase, the EIA data showed.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here