TOKYO (Reuters) – Oil prices fell Friday as concerns over Chinese cities frozen by coronavirus outbreaks tempered a rally led by strong import data from the largest crude oil importer in the world and the United States are planning a large stimulus package.
Brent fell 46 cents, or 0.8%, to $ 55.96 at 0544 GMT, after gaining 0.6% on Thursday. US West Texas Intermediate crude was 29 cents, or 0.5%, lower than $ 53.28 a barrel, having increased more than 1% in the previous session.
Brent is on its way to its first weekly decline in three weeks, while US crude is on track for a third weekly rise.
As manufacturers face unprecedented challenges in balancing supply and demand equations with computation involving vaccine launch versus blockages, financial contracts have been spurred by strong stocks and a weaker dollar, which makes oil cheaper, coupled with strong Chinese demand.
Nearly $ 2 Trillion US COVID-19 Aid Package Unveiled by President-elect Joe Biden Could Increase Oil Demand from the largest consumer of crude oil in the world, but worse-than-expected jobs data cast a shadow over the plans.
“With the Biden package offset by weak US employment data, Asian markets are not inclined to force prices,” said Jeffrey Halley, senior market analyst at OANDA.
“They will let North America decide whether a retest of the recent highs is warranted by the end of the week,” he said.
China’s crude oil imports increased 7.3% in 2020, with record arrivals in two out of four quarters as refineries increased runs and low prices pushed inventories, customs data showed Thursday.
But China reported the largest number of daily COVID-19 cases in more than 10 months on Friday, limiting one week that resulted in more than 28 million people under lockdown and the country’s first death. from the coronavirus in eight months.
“The euphoria of the oil market is unequivocally strong, but the market indicators from Asia is mixed, ”said RBC Capital Markets.
“China, the global engine of oil demand growth, is grappling with new COVID outbreaks,” he said.
Reporting by Aaron Sheldrick; Editing by Michael Perry and Shri Navaratnam