Coronavirus in China Drops Oil Prices Worldwide

(Patria) - Oil prices fell on Thursday, as a growing number of COVID-19 cases in China diminished hopes for a recovery in fuel demand in the world's second-largest oil consumer. The scale of the latest epidemic and doubts about official data have prompted some countries to introduce new travel rules for Chinese visitors, even as China began to dismantle the world's strictest COVID lockdown and testing regime, Reuters reports.

Brent crude futures for February delivery weakened by 42 cents, or 0.5%, to $82.84 a barrel, while US crude weakened by 50 cents, or 0.6%, to $78.46 a barrel. Oil markets were also hit by expectations of another US interest rate hike in the United States, as the Federal Reserve tries to curb price growth in a tight labor market.

US crude oil inventories fell less than expected, by about 1.3 million barrels, in the week ended December 23, according to market sources citing data from the American Petroleum Institute.

Markets, however, received some support due to Russian President Vladimir Putin's ban on the export of Russian crude oil and petroleum products from February 1 for a period of five months to countries that adhere to the Western price cap.