WTI Crude Oil Prices Drop as More Restrictions Weigh on Demand
Arslan Butt • 1 min read
WTI crude oil is starting Friday on a bearish footing, with prices on the decline after touching the highest level seen in 11 months during the previous week, as oil demand concerns return after China imposed fresh restrictions due to the pandemic. At the time of writing, WTI crude oil is trading at around $52.55 per barrel.
Crude oil prices had strengthened in recent sessions after data revealed that China had increased imports of crude during 2020, despite the coronavirus pandemic and lockdowns. As the world’s second largest energy consumer, markets were also buoyed at the prospect of China’s economy rebounding after successfully overcoming the crisis. However, the latest round of lockdowns imposed across the country have heightened fears that China’s oil demand could suffer.
According to ANZ Research, the latest round of restrictions worldwide have cut down international flight traffic by 25% over the past week alone. The reduction in international flights has not only impacted the airline sector but is likely to impact the demand for jet fuel once again.
Later today, WTI crude oil is likely to experience volatility on the release of the EIA report from the US. Analysts had forecast a drop of 1.2 million barrels last week, but the API report which released earlier this week revealed a build in crude inventories by 2.6 million barrels instead.