NEW YORK: Oil prices in the international market fell by 2% on Friday amidst worries about sluggish Chinese demand after the second-largest economy has made widespread curbs to contain the spread of Covid-19 cases.
Brent crude settled down $1.71, or 2 per cent, to trade at $83.63 a barrel on Friday, having retraced the earlier gains.
U.S. West Texas Intermediate crude futures were down $1.66, or 2.1 per cent at $76.28 a barrel.
According to Reuters, Brent and WTI’s structures dipped into contango this week for two-month spreads, implying oversupply with near-term delivery contracts priced below later deliveries.
On Friday, China, the world’s top oil importer, reported a new daily record of 32,000 Covid-19 infections as cities across the country struggled to enforce mobility curbs to contain the outbreaks.
This Covid-19 spread in is has lowered the oil demand by around 1 million barrels per day.
Meanwhile, G7 and European Union diplomats have discussed a Russian oil price cap between $65 and $70 a barrel, however, an agreement still needs to be reached.
A meeting of EU government representatives scheduled for Friday to discuss the proposal was postponed. Reuters
