SULAIMANI (ESTA) — Oil prices dropped on Thursday on caution about dwindling fuel demand in China, the world’s biggest oil importer, due to the economic impact of COVID-19 restrictions.
Brent crude futures had fallen 36 cents to $105 a barrel by 0734 GMT. U.S. West Texas Intermediate crude futures slipped 28 cents to $101.7 a barrel.
The U.S. Energy Information Administration said crude stocks rose by just 692,000 barrels last week, short of expectations, but distillate inventories, which include diesel and jet fuel, fell to their lowest since May 2008, according to Reuters.
In China, Beijing closed some public spaces and stepped up COVID-19 checks at others on Thursday, as most of the city’s 22 million residents embarked on more mass testing aimed at averting a Shanghai-like lockdown, which has disrupted factories and supply chains raising concerns about the outlook for the country’s economic growth, the agency reported.
“Lockdown in China remains top of mind and the main opposing driver (to upside to prices),” Reuters quoted Stephen Innes, managing partner at SPI Asset Management, as saying.
