Oil prices drop further after China lockdown

Oil prices were lower on Friday as concerns about Chinese cities in lockdown due to coronavirus outbreaks tempered a rally driven by strong import data from the world’s biggest crude importer and U.S. plans for a large stimulus package.

Brent was down 46 cents, or 0.8%, at $55.96 by 0544 GMT, after gaining 0.6% on Thursday. U.S. West Texas Intermediate crude was 29 cents, or 0.5%, lower at $53.28 a barrel, having risen more than 1% the previous session.

Brent is heading for the first weekly decline in three weeks, while U.S. crude is on track for a third weekly gain.

While producers are facing unparalleled challenges balancing supply and demand equations with calculus involving vaccine rollouts versus lockdowns, financial contracts have been boosted by strong equities and a weaker dollar, which makes oil cheaper, along with strong Chinese demand.

A nearly $2 trillion COVID-19 relief package in the U.S. unveiled by President-elect Joe Biden may increase oil demand from the world’s biggest crude consumer but worse than expected jobs data cast a shadow over the plans.

via Reuters