Oil suffers as more pandemic lockdowns emerge

Photo: AP

Crude prices were under pressure as oil demand fell amid further lockdowns emerged across the globe. Top consumers shun the market as crude inventories stayed at record highs.

The surge in coronavirus cases globally forced a series of renewed lockdowns, including strict new measures in Southern California in the United States, the world’s top oil consumer, Reuters reported.

Brent crude oil futures were down 20 cents, or 0.4%, at $49.05 a barrel by 0401 GMT, while West Texas Intermediate oil futures fell 20 cents, or 0.4%, to $46.06 a barrel.

Crude pared earlier vaccine roll-out gains after Los Angeles county had another record high in coronavirus cases and South Korea raised their alert level.

The restrictions in California call for bars, hair and nail salons and tattoo shops to close again.

The southern German region of Bavaria announced it would impose a tougher lockdown from Wednesday, while South Korean authorities heightened social distancing rules for the capital Seoul and surrounding areas that would last until at least the end of the month.

Also weighing on prices, US energy firms last week added oil and natural gas rigs for the 11th time in 12 weeks as producers return to the wellpad even as most are cutting spending this year and next.

Still, rapid demand recovery in China and developments in COVID-19 vaccines capped price losses.

China’s exports in November rose at their fastest pace since February 2018, helped by strong global demand and as the recovery in manufacturing in the world’s second-largest economy outpaced those of its major trading partners.

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