SULAIMANI (ESTA) — Oil prices fell on Thursday on fresh worries about weakened fuel demand, after England clamped down on travel and China also sought to limit Lunar New Year trips to stem a surge in coronavirus cases.
Brent crude futures fell 41 cents to $55.40 a barrel at 0612 GMT. U.S. West Texas Intermediate (WTI) crude futures fell 39 cents to $52.46 a barrel.
“It looks like the market’s really paying attention to some of the demand concerns. The one which has really taken over moreso than others is what’s going on in China,” Reuters cited Commonwealth Bank Commodities Analyst Vivek Dhar as saying.
The market had been supported earlier this week by a surprisingly large decline in U.S. crude stockpiles in the week to January 22.
Oil inventories dropped by 9.9 million barrels, the most since July, to their lowest since March, the Energy Information Administration reported on Wednesday.
More concerning is China, Reuters cited analysts as saying, whose increasing fuel demand supported the market last year. The country is now facing a rise in COVID-19 cases as it heads into what is normally the busiest travel season of the year.
“China — they were the ones supporting the market. If you have issues forming in China, that really puts a brake on the demand story for now,” Dhar told Reuters.
