Oil prices fell by about 2% on Friday, with rising tensions between the US and China, and doubts about when fuel demand would come out of the coronavirus crisis.
The demand for fuel has declined in recent months, as the coronavirus pandemic has caused countries to set up travel restrictions and close businesses’ doors. Oil has been collected recently with the easing of restrictions.
However, prices fell after China said it would not release its annual growth target for the first time on Friday. As the pandemic continues to shake the economy, Beijing has committed to making more government spending.
Brent crude futures fell 93 cents, or 2.6%, to settle at $35.13 a barrel. West Texas Intermediate (WTI) crude ended 67 cents, or 2%, lower at $33.25 a barrel.
Despite Washington’s warnings that it will react strongly, China is said to be committed to implementing new national security legislation in Hong Kong after last year’s pro-democracy unrest.
The market is aware that a second wave coronavirus outbreak is not a remote possibility, and a new crash round could push prices to much lower levels.
Oil prices have fallen more than 40% since 2020. The recent recovery is partly due to the Organization of Petroleum Exporting Countries and their efforts to reduce the supply of allies. OPEC + has been reducing its supply by 9.7 million barrels a day since May 1.
As an indicator of future production, the number of US rigs fell 21 pieces down to 318 this week. As a sign of the increasing relaxation, US crude inventories fell last week.
