Oil Sinking, Retreating As China COVID-19 Spike Creates Gas Demand Considerations

© Reuters.

From Gina Lee

Investing.com – Oil was down in Asia on Friday morning and continued its retreat from the previous week’s 11-month highs as new COVID-19-induced restrictive measures were introduced in China and the ensuing fuel demand concern.

declined 1.21% to $ 55.42 by 10:36 p.m. (03:36 a.m. GMT) and fell 1.32% to $ 52.43. However, both Brent and WTI futures stayed above the $ 50 mark.

The recovery in fuel demand at the world’s largest oil importer had helped Balck Liquid’s profit in late 2020, offsetting declining demand in the US and Europe. However, in a new wave of COVID-19 cases in the country, restrictive measures to contain the spread of the virus have been reintroduced.

“Indeed, investors are struggling to overcome short-term pain for long-term gain through the weekend as the number of COVID-19 cases in China is the top demand concern for traders,” said Stephen Innes, chief marketing strategist at Axi. in a note.

Shanghai reported the first locally transmitted cases in two months on Thursday, and the Hong Kong SAR will reportedly be under lockdown in the city’s Yau Tsim Mong district for the first time this weekend.

Preventive curbs are being introduced in other areas, and Beijing residents are being urged not to travel for the upcoming New Year holidays, when tens of millions of urban workers normally return to their villages.

Sudden new restrictions worldwide have hit the aviation industry hard. The number of flights worldwide has fallen by 25% in the past week, analysts from ANZ Research said in a statement.

“This is likely to weigh heavily on demand for jet fuel,” the note warned.

is due later in the day. The dates were delayed by both a public holiday and the inauguration of President Joe Biden on Wednesday.

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