NEW YORK, Dec 29 (Reuters) – Oil prices fell for a second straight session on Thursday on uncertain demand prospects as more countries considered restrictions on Chinese travelers infected with the spreading COVID-19 in the first oil importing country.
The Chinese government is dismantling pandemic restrictions, but a rise in infections there is leading to stricter travel rules for Chinese visitors to some countries.
Brent crude futures for February delivery fell one dollar to settle at $82.26, down 1.2%. US West Texas Intermediate crude futures settled at $78.40 a barrel, down 56 cents, or 0.7%.
Britain is considering whether to impose restrictions on people arriving from China. The United States, Japan, India and Taiwan have already imposed testing on arrivals from the country.
Crude limps towards year-end in tight trade – uninspired by lifting of COVID restrictions in China amid soaring cases, with little to galvanize Crude bulls or bears in report benign from today’s EIA,” said Matt Smith, principal oil analyst at Kpler.
U.S. crude oil inventories rose unexpectedly last week as imports rose and exports fell, the Energy Information Administration (EIA) said Thursday.
Despite the surprise rise in crude oil inventories, the report itself was “positive” and showed a “strong rebound” in implied demand for oil, leading to large drawdowns of refined products, the Swiss bank’s Giovanni Staunovo said. UBS.
Both oil contracts fell more than 2% at the start of Thursday’s session, but pared losses as the U.S. dollar slid as investors jittery about interest rate hikes.
A weaker dollar makes oil cheaper for holders of other currencies.
“With so many moving parts, I don’t think anyone can say anything with a high degree of conviction,” said Craig Erlam, senior market analyst at OANDA. “OPEC+ could make an announcement at any time and suddenly everything changes. Not to mention Russia’s war in Ukraine and how it evolves.”
Russia fired dozens of missiles into Ukraine early Thursday, targeting Kyiv and other cities in one of the biggest aerial assaults on Moscow since the start of the war.
Meanwhile, TC Energy Corp (TRP.TO) said the 622,000 barrel-per-day Keystone pipeline is now operational, weeks after a major oil spill in rural Kansas.
The line shutdown affected supply in the United States and briefly boosted oil prices, although there was little change in either benchmark after the settlement.
(This story has been corrected to show WTI is down 56 cents, not $1.13, in the third paragraph)
Reporting by Shariq Khan; additional reporting by Rowena Edwards and Jeslyn Lerh; Editing by Chizu Nomiyama, Emelia Sithole-Matarise, Josie Kao, Leslie Adler and David Gregorio
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