Crude oil prices drifted lower on Thursday, weighed down by concerns about a surge in Covid-19 cases in China, and on data showing an increase in U.S. crude inventories in the week ended December 23rd.
With Covid -19 cases rising in China, concerns about a global recession have risen, raising the possibility of a drop in energy demand.
There are concerns China may not be sharing data on any signs of evolving strains that could spark fresh outbreaks in countries around the world.
Already, several countries have announced measures in an effort to keep infections from spreading beyond China’s borders. The U.S., Italy, Japan, India and Malaysia have announced that they would increase health measures for travellers from China.
A weak dollar helped limit oil’s downside.
West Texas Intermediate Crude oil futures for February ended lower by $0.56 at $78.40 a barrel.
Brent crude futures were down $0.48 at $83.51 a barrel a little while ago.
Data released by U.S. Energy Information Administration (EIA) this morning showed crude inventories in the U.S. rose by 718,000 barrels last week, compared with forecasts for a drop of 1.5 million barrels.
The EIA data also showed gasoline stockpiles fell by 3.1 million barrels last week, as against expectations for a drop of 2.3 million barrels.
Meanwhile, distillate stockpiles increased by 0.3 million barrels last week, as against expectations for a drop of 2 million barrels.
The American Petroleum Institute released a report late Wednesday showing U.S. crude oil inventories fell by 1.3 million barrels in the week ended Dec. 23, which was less than expected.