Oil prices rise, but impact of lockdowns restrain gains

Oil pumpjacks are seen in Lagunillas, Venezuela May 24, 2018. (Reuters)

SULAIMANI (ESTA) — Oil prices rose on Monday as a weaker offset dollar fresh concerns about the hit to global fuel demand from renewed lockdowns to curb the spike in coronavirus infections.

Brent crude futures for March rose 19 cents to $55.60 a barrel by 0824 FMT, while U.S. West Texas Intermediate (WTI) crude was up 24 cents at $52.51 a barrel.

“Petroleum markets have been in a tug of war recently: Downward revisions to the global demand outlook from the IEA and renewed fears of Chinese demand deceleration due to new coronavirus strains have kept a lid on oil prices,” Reuters quoted Citi analysts as saying in a note.

“Yet, production outages from Libya and Kazakhstan along with OPEC+ cuts and a weaker U.S. dollar have supported market sentiment.”

Libya’s Waha oil has resumed production after pipeline repairs while output from Kazakhstan’s giant Tengis field was disrupted by a power outage on January 17, Reuters reported.

Last Friday prices came under further pressure after data from the U.S. Energy Information Administration showed U.S. crude inventories surprisingly rose by 4.4 million barrels in the week to Jan. 15, versus expectations for a draw of 1.2 million barrels.

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