Oil prices fell on Monday amid renewed concerns about global fuel demand as the virus cases retsarted in China the world’s second oil user, following severe coronavirus lockdowns and infections in Europe.
Brent crude oil futures were down 65 cents, or 1.2%, at $55.34 a barrel by 0439 GMT, after having climbed to $56.39, their highest since Feb. 25, 2020. Brent rose in the previous four sessions.
West Texas Intermediate (WTI) slipped 44 cents, or 0.8%, to $51.80 a barrel. WTI rose to its highest in nearly a year on Friday.
China saw the largest daily increase in virus infections in five months on Monday, with new infections spiking in Hebei, which surrounds the capital Beijing. Shijiazhuang, the provincial capital and epicenter of the new epidemic, has been banned from taking people and vehicles into the streets as authorities try to contain the spread.
Most of Europe is currently under the strictest restrictions.
Crude oil prices were backed by Saudi Arabia’s commitment last week, with the promise of a voluntary cut of 1 million barrels of oil per day in February and March, as part of an agreement to keep production stable during the new lockdowns by most OPEC + producers.
In fact, Brent is underperforming after the Saudi decision on additional support for production and Iraq’s increase in prices for crude oil sales to Asia in February.