Oil futures were slightly lower Thursday, under pressure as traders monitored slowing travel activity in China amid new COVID-19 infections and unease over the pace of vaccine rollouts in Europe which are weighing on energy demand.
West Texas Intermediate crude for March delivery
fell 19 cents, or 0.4%, to $52.66 a barrel on the New York Mercantile Exchange. March Brent crude
was down 9 cents, or 0.2%, at a $55.72 a barrel on ICE Futures Europe. April Brent
the most active contract, was off 14 cents, or 0.3%, at $55.39 a barrel.
Chinese authorities have taken steps to dissuade travel around the Lunar New Year, the Associated Press reported, noting officials predict Chinese will make 1.7 billion trips during the travel rush, down 40% from 2019. Travel was curtailed in 2020 due to the coronavirus.
“Near-term fundamental headwinds continue to weigh heavy,” said Stephen Innes, chief global markets strategist at Axi, in a note.
“Chinese road and air travel mobility data are declining into the Chinese New Year holiday due to travel restrictions and a spike in coronavirus infections. Simultaneously, worries of vaccine rollouts leading to protracted lockdowns in Europe round out the carousel of negativity,” he said.
Oil prices on Wednesday were supported by data showing a 10 million barrel decline in U.S. crude inventories last week which analysts said was due to a pick up in U.S. crude exports and a drop in imports.
A strengthening U.S. dollar
also weighed on prices as buyers using other currencies must pay more for dollar-denominated oil when the dollar rises.