Oil Falls Most in a Month on New China Covid Scare, Dollar Surge By Investing.com

© Reuters.

By Barani Krishnan

Investing.com – Oil prices fell the most in a month on Friday, tumbling more than 2%, after concerns over Covid-19 lockdowns in top crude destination China hit a market that resisted for weeks worries about piling fuel stockpiles at home.

A resurgence in the , the currency on which oil trades, also made buying of the commodity less competitive for holders of the euro and other change — indirectly hitting demand for crude.

New York-traded , the key indicator for U.S. crude, settled down $1.21, or 2.2.%, at $52.36 per barrel. It was WTI’s biggest one-day slide since Dec. 18, although it rounded out the week with a 0.5% gain.

London-traded , the global benchmark for crude, settled down $1.32, or 2.3%, at $55.10. For the week, Brent lost 89 cents, or 1.6%.

China ramped up lockdowns on Friday after reporting the highest number of daily Covid-19 cases in more than 10 months. The world’s No. 2 economy capped a week that has resulted in more than 28 million people under lockdown as it suffered its first coronavirus death on the mainland since May.

“The Covid-19 pandemic’s spread is taking centre stage again and traders are getting increasingly worried about the long duration of European lockdown and about the new restrictions (in) China,” Bjornar Tonnage from Rystad Energy was quoted saying by Reuters. “The market is structurally bullish, but it may be getting too ahead of forward-looking fundamentals.”

In the United States, fuel products had been the oil complex’s weakest link for months. 

stockpiles rose 4.395 million barrels during the first week of January, compared with expectations for a 2.69 million-barrel build, data from the U.S. Energy Information Administration said.

Stockpiles of , which include diesel and , rose by a more-than-expected 4.786 million barrels against expectations for a 2.67 million-barrel increase, the EIA data showed.


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