Oil prices are falling due to renewed concerns about the coronavirus while cases in China are on the rise

SINGAPORE (Reuters) – Brent crude oil prices fell $ 1 a barrel on Monday, hit by renewed concerns about global fuel demand amid harsh coronavirus blockages in Europe and new brakes on movement in China, the second largest oil consumer in the world, where infections were on the rise.

Brent crude futures fell 78 cents, or 1.4%, at $ 55.21 a barrel against 0758 GMT, after falling from $ 1 to a session low of $ 54.99 earlier. Brent got up in the previous four sessions.

US West Texas Intermediate (WTI) fell 52 cents, or 1%, to $ 51.72 a barrel. WTI rose to its highest level in nearly a year on Friday.

“Covid hotspots flaring up in Asia, with 11 million (in) lockdowns in China’s Hebei province … along with a hint of uncertainty over Fed policies, has led to some gates out of the gates,” Stephen Innes, chief global market strategist at Axi, said in a note.

Mainland China saw the largest daily increase in viral infections in more than five months, authorities said on Monday, as new infections rose in Hebei, which surrounds the capital Beijing.

Shijiazhuang, the provincial capital and epicenter of the new outbreak, has been shut down, with people and vehicles barred from leaving as authorities try to contain the spread.

According to the Oxford Stringency Index, which tracks measures such as travel bans and school and workplace closures, most of Europe is now subject to the toughest restrictions.

“Brent is underperforming after Crown Prince Mohammed bin Salman revealed Saudi Arabia’s future outside of oil and Iraq raised prices for crude oil sales to Asia in February,” said Edward Moya, senior market analyst at OANDA.

The Saudi Crown Prince on Sunday unveiled plans to build a carbon-free city at NEOM, the first major construction project for the $ 500 billion flagship company, aimed at diversifying the economy of the world’s largest oil exporter.

Still, oil price losses were curbed by plans for US President-elect Joe Biden to reveal trillions of dollars in new virus-fighting bills this week, much to be funded by lending more.

Crude prices were supported by Saudi Arabia’s pledge last week to voluntarily cut oil production by 1 million barrels per day (bpd) in February and March as part of a deal for most OPEC + producers to keep production stable during new lockdowns.