Oil drops as new COVID cases in China trigger clampdowns

Friday,   22-Jan-2021   08:49 AM (IST)

Oil prices fell in early trade on Friday, retreating further from 11-month highs hit last week, on worries new pandemic restrictions in China will curb fuel demand in the world's biggest oil importer. U.S. West Texas Intermediate (WTI) crude CLc1 futures dropped 47 cents, or 0.9%, to $52.66 a barrel at 0148 GMT, after slipping 18 cents on Thursday. Brent crude LCOc1 futures fell 45 cents, or 0.8%, to $55.65 a barrel, erasing a 2 cent gain on Thursday. Recovering fuel demand in China underpinned market gains late last year while the United States and Europe lagged, but that source of support is fading as a fresh wave of COVID-19 cases has sparked new restrictions to contain the spread. The market is awaiting official oil inventory data from the U.S. Energy Information Administration on Friday, after industry data on Wednesday showed a surprise 2.6 million barrel increase in U.S. crude inventories last week compared with analysts' forecasts for a 1.2 million barrel draw. The EIA weekly report has been delayed by two days due to the Martin Luther King Jr. holiday and Inauguration Day.