Oil falls on re-locks, stronger greenback by Reuters

© Reuters. FILE PHOTO: Crude oil storage tanks seen in an aerial photo at the Cushing Oil Knot

From Bozorgmehr Sharafedin

LONDON (Reuters) – Prices fell as much as $ 1 a barrel on Monday. This was hurt by renewed concerns about global fuel demand amid strong coronavirus lockdowns around the world as well as a stronger US dollar.

Brent fell 80 cents, or 1.4%, to $ 55.19 a barrel at 1010 GMT, after previously falling $ 1 to a session low of $ 54.99.

US West Texas Intermediate (WTI) was down 49 cents, or nearly 1%, to $ 51.75 a barrel.

“The renewed concerns about the demand due to a very high number of new corona cases and further mobility restrictions as well as the stronger US dollar are generating sales pressure,” said Eugen Weinberg, analyst at Commerzbank (DE :).

According to the Oxford Stringency Index, which records measures such as travel bans and closings of schools and workplaces, most of Europe is currently subject to the strictest restrictions.

Mainland China saw the largest daily surge in virus infections in more than five months, authorities said Monday as new infections emerged in Hebei, which surrounds the capital, Beijing.

Shijiazhuang, the provincial capital and epicenter of the new outbreak, is on lockdown and people and vehicles are not allowed to leave as authorities try to contain the spread.

A stronger dollar, supported by hopes of further stimulus to stimulate the world’s largest economy, also weighed on oil prices.

Oil is usually valued in dollars, so a stronger greenback makes crude oil more expensive for buyers with other currencies.

Brent and WTI rose nearly 8% last week, helped by Saudi Arabia’s pledge to voluntarily cut oil production by 1 million barrels per day (bpd) in February and March to keep production stable for most OPEC + producers hold.

The Saudi cut should bring the oil market into deficit for most of 2021 despite lockdowns, analysts said.

JBC Energy Research said Monday that tighter containment measures put in place by European nations are affecting fuel demand, but added, “Our projections suggest that this recent production cut in Saudi Arabia should be enough to keep crude oil fundamentals largely solid. “

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