Oil prices fell for the second straight session on Monday as fresh lockdown by the new Coronavirus raised fresh concerns about global fuel demand.
Brent crude futures for March fell 8 cents, or 0.1 per cent, to $55.38 a barrel, while US West Texas Intermediate crude fell one cent to $52.26 a barrel, according to Reuters.
“Signs of low demand are dominating the market,” said ANZ analysts.
Pointing to lockdowns in Hong Kong, China and possibly France, he said there has been an increase in cases of the coronavirus, which has reduced business activity and fuel consumption.
New cases of the coronavirus surfaced in China on Monday, boosting the prospects for lower demand in the world’s largest energy-consuming country, a major pillar of global oil consumption.
Prices came under further pressure last Friday when data from the US Energy Information Administration showed that US crude reached 4.4 million barrels on January 15, instead of a surprise 1.2 million barrels.
Baker Hughes ‘data show that the supply of oil and natural gas from US energy companies has increased for the ninth consecutive week, but Baker Hughes’ data shows that this is higher than last year. It is still 52% less.
According to Stephen Schork, editor of the Schork Report, the editor of the oil market newsletter, producers are expected to increase their supply counts in the coming weeks after maximizing production before spring.
It should be noted that some support for global oil prices has been in recent weeks due to cuts in surplus production by the world’s top exporter, Saudi Arabia.
But investors are focused on resuming talks between the United States and Iran on a nuclear deal that would lift Washington’s embargo on oil exports to Iran and boost supplies.