Oil futures declined sharply on Friday, prompting US prices to post their gains for the week, as investors weighed in on the outbreak of fresh COVID-19 in China, which has been an engine of demand as other major Economies were slowed by the coronovirus epidemic.
“Oil market euphoria is disproportionately strong, but Asia’s market indicators are mixed,” RBC Capital Markets analyst Michael Tran said in a note.
“China, the global engine of increased oil demand, is wrestling with new COVID outbreaks and lockouts in various regions across the country, which has led to a shift in discretionary driving patterns,” he said.
China says it is now treating more than 1,000 people for COVID-19 as cases are rising again in the north of the country. The cities of Shijiazhuang and Xingtai and Langfang are under virtual lockdown, confusing more than 20 million people in their homes.
“China’s growing health crisis has led to a decline in oil as it is the largest importer of energy in the world,” CMC Markets UK market analyst David Madden said in a market update. Beijing Administration puts 22 million people on lockdown due to increasing cases of COVID-19 [oil] Demand fear is in vogue. ”
According to Johns Hopkins University data, the global tally for confirmed cases of coronovirus climbed above 93 million on Friday, while according to Johns Hopkins University, the death toll rose above 1.99 million. The US has the highest number of cases in the world at 23.3 million and 388,705, or more than a quarter of the global total.
Against that backdrop, West Texas Intermediate crude for February delivery CL.1,
The New York Mercantile Exchange fell $ 1.21, or 2.3%, to settle at $ 52.36 a barrel.
According to Dow Jones market data, prices rose in a week, based on the contract of the month of the front, with a 0.2% increase on Thursday compared to the previous month, after hitting a high on Thursday after February of the previous month She went.
March Brent Crude BRN00,
ICE Futures lost $ 1.32, or 2.3%, to $ 55.10 a barrel on the global benchmark, 1.6% weekly decline.
“Crude has seen a spectacular run in the first few weeks of 2021,” said James Hatzignis, chief market strategist at Plutus Capital Advisors. “However, it has now reached a critical level.”
Oil prices have risen very quickly, an improvement. All rapid growth has been in the price. ”
This week, “We saw reports of a decrease in crude oil surpluses, increased refinery activity and increased gasoline demand, all rapid growth for crude,” he told MarketWatch, but oil prices have risen too quickly , An improvement is overdue. All rapid growth has been in the price. ”
Data from Baker Hughes BKR,
However, US oil-rig count increased for the eighth straight week on Friday, pushing higher production further.
Hatzignis pointed out that sugar demand could decline as countries “strategically increased their reserves” in 2020 when oil prices were historically low.
Meanwhile, some forecasts indicate that US travel “will not return until the third quarter of this year,” adding that he expects to see a significant increase in oil demand in late spring when the transition drops significantly. Should be
Demand should also see a “minor bump” from President-Elect Joe Biden’s proposed $ 1.9 trillion stimulus package, he said.
For WTI, “$ 50 is a large psychological price level” and it would “develop a major recession for Craze to fall below that level”, Hetzigninis said.
He said, “Given the combination of Saudi’s commitment to manage supplies and signals that we are starting to see the light at the end of the tunnel when it comes to transition, I think we will be in the long run $ Will stay above 50 “.
Oil as well as petroleum products traded on Nimex fell on Friday. February Gasoline RBG21,
The price of the February heating oil HOG21 decreased by 1.6% to $ 1.5284 a gallon, with a 0.9% decrease in the week.
It fell 1.6% to $ 1.5929 per gallon for a weekly increase of about 0.9%.
February Natural Gas NGG21,
British thermal units settled at $ 2.737 per million, ending up 2.7% for the session and 1.4% higher for the week.