LONDON (Reuters) – Oil prices fell on Monday as a stronger dollar, fears of COVID-19 cases rising worldwide, and slow pace of virus vaccination overcame a better-than-expected quarterly rebound for the Chinese economy.
Brent crude was down 16 cents, or 0.3%, to $ 54.94 a barrel at 1445 GMT, and US West Texas Intermediate crude was down 10 cents, or 0.2%, to $ 52.26.
“Crown-induced economic fears, a stronger US dollar, and more pessimistic investor sentiment are all playing their part in Brent trading … about $ 3 less than last Wednesday,” he said. Commerzbank analyst Eugen Weinberg.
Benchmarks had risen in recent weeks, buoyed by the introduction of the COVID-19 vaccine and a surprise cut in production by Saudi Arabia. But the slow pace of vaccination has raised doubts about how soon economies could recover.
A UK official said the vaccine’s launch in Britain was limited by a “lumpy” manufacturing process and Pfizer said it was distributing fewer doses in Europe in January than originally planned.
“The vaccination campaigns, while ongoing, are lagging behind the speed needed to accelerate a global recovery in the first quarter and the return of oil demand will be slow,” said Bjornar Tonhaugen, chief oil market at Rystad Energy.
The US dollar strengthened for a third consecutive day on Monday to hit a four-week high, weighing on crude oil prices. The price of oil is usually in dollars, so a stronger dollar makes crude oil more expensive for buyers with other currencies.
Security concerns ahead of this week’s US presidential inauguration are also dragging investor sentiment, PVM Oil analyst Tamas Varga said.
“In addition to the runaway coronavirus, this week’s tense presidential inauguration can also cause unease among investors,” he said.
Oil prices recovered some losses after Chinese data showed the world’s largest oil importer’s economy accelerated its recovery from the coronavirus pandemic.
Prices also found support in a drop in Libyan oil production, with Waha Oil Company reducing production to 200,000 barrels per day due to maintenance of the main pipeline connecting the Al-Samah and Al-Dhahra oil fields. at the port of Es Sider.
Reportage by Bozorgmehr Sharafedin in London; additional reportage by Aaron Sheldrick in Tokyo. Editing by Jason Neely, Mark Potter and Jane Merriman