Oil prices edge lower as Covid-19 lockdown concerns overshadow demand prospects

Published
8
A crude oil tanker is seen at Qingdao Port, Shandong province, China, April 21, 2019. — Reuters
A crude oil tanker is seen at Qingdao Port, Shandong province, China, April 21, 2019. — Reuters

Oil prices slipped for a second straight session on Monday as renewed Covid-19 lockdowns 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 by 0717 GMT, while US West Texas Intermediate crude for March was at $52.26 a barrel, down 1 cent.

“Signs of weaker demand weighed on the market,” ANZ analysts said, pointing to lockdowns in Hong Kong, China and possibly France as Covid-19 cases rise, restricting business activity and fuel consumption.

China reported a climb in new Covid-19 cases on Monday, casting a pall over demand prospects in the world’s largest energy consumer, the main pillar of strength for global oil consumption.

Last Friday prices came under further pressure after data from the US Energy Information Administration showed US crude inventories surprisingly rose by 4.4 million barrels in the week to Jan 15, versus expectations for a draw of 1.2 million barrels.

The number of oil and natural gas rigs added by US energy firms rose for a ninth week in a row in the week to Jan 22, but are still 52pc below this time last year, data from Baker Hughes showed.

The rig count is expected to rebound further in the weeks ahead as producers maximise output ahead of spring, according to Stephen Schork, editor of oil market newsletter editor The Schork Report.

Some support for prices has come in recent weeks from additional production cuts from the world’s top exporter, Saudi Arabia.

But investors are watching for a resumption of talks between the United States and Iran on a nuclear accord — which could see Washington lifting sanctions on Tehran’s oil exports, boosting supply.

Iran’s oil minister said on Friday the country’s oil exports have climbed in recent months and its sales of petroleum products to foreign buyers reached record highs despite US sanctions.

On Sunday, Indonesia said its coast guard had seized the Iranian-flagged MT Horse and the Panamanian-flagged MT Freya vessels over suspected illegal fuel transfers off the country’s waters.

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Restructuring plans
Updated 10 Nov, 2026

Restructuring plans

It would be a much wiser move, politically speaking, to take up any debate on administrative restructuring again after the next general election.
Extreme heat
Updated 10 Nov, 2026

Extreme heat

Climate adaptation is yet to find a place in our agricultural policies.
Israel power struggle
10 Nov, 2026

Israel power struggle

A POWER struggle is emerging after last month’s elections in Israel resulted in no party securing the requisite...
Antalya agenda
Updated 09 Nov, 2026

Antalya agenda

For Pakistan, the priority should be to secure easier access to climate funds, more grants rather than debt-creating loans, and clear deadlines for financial contributions.
Beyond viewership
09 Nov, 2026

Beyond viewership

PAKISTAN has an enormous appetite for online content. According to the Pakistan Telecommunication Authority, it...
Rabid Modi
Updated 09 Nov, 2026

Rabid Modi

Modi’s silence throughout his reign of fear shows his endorsement of hate.