NEW YORK- Oil prices fell more than 2 percent, with both contracts posting a loss on the week 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.
Brent fell $1.32, or 2.3 percent, to settle at $55.10 a barrel. US West Texas Intermediate crude settled down $1.21, or 2.3 percent, at $52.36 a barrel.
Both benchmarks, which hit their highest in nearly a year earlier in the week, posted their first weekly declines in three weeks, with Brent down 1.6 percent on the week and US crude down about 0.4 percent.
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.
These positives were called into question on Friday as the dollar rose and China ramped up lockdown measures.
A nearly $2 trillion COVID-19 relief package in the United States unveiled by President-elect Joe Biden may increase oil demand from the world’s biggest crude consumer. Still, some analysts said the move may not be enough to stoke demand.
“In terms of being able to talk about demand, Asia was the only bright spot,” said John Kilduff, partner at Again Capital Management in New York. “This renewed lockdown is striking at the heart of the demand picture in Asia. It’s trouble.”