Florence Tan

SINGAPORE (Reuters – On Friday, oil prices eased again due to rising concerns about Washington’s inability to reduce prices. However, fuel demand was affected by China’s efforts to contain a COVID-19 virus outbreak.

At 0150 GMT, futures declined 30 cents (or 0.4%) to $84.17/barrel. U.S. West Texas Intermediate crude fell 45 cents or 0.6% to $81.67/barrel

China is the world’s No. 2 oil consumer. China, the No. 2 oil importer globally has suspended certain international flights. The virus that caused the outbreak in Tianjin has also spread to Dalian.

Beijing and many other cities have also encouraged people to keep their homes open during the Lunar New Year holidays. This may help lower demand for transportation fuel during peak travel times.

Avtar Sandu, Phillip Futures’ commodities manager, said that “market is a bit tooppish”. He also mentioned concerns over reports about the COVID-19 status in China, and on US plans to sell strategic petroleum reserves (SPR), in the United States.

On Thursday, the U.S. Energy Department announced that it sold 18,000,000 barrels of strategic crude oils reserves to six businesses. Exxon Mobil (NYSE:) A unit of refiner Valero Energy Corp (NYSE)

Brent and WTI oil prices will rise for the fourth week straight, supported by supply worries in Libya and Kazakhstan, and an increase in inventories below 2018 levels. Investors are optimistic Omicron will have a short-term impact on oil demand and the global economy.

Many banks predict that oil prices will rise to $100 per barrel in the coming year, as more people are expected to use them than supply.

Edward Moya from OANDA stated that although the outlook for the near-term is uncertain, he believes it to be positive and will last a while.

He said that with oil prices at over $80 a barrel there’s growing pressure on the White House for OPEC+ lobbying to increase their production quotas.

Moya suggested that Biden might resort to another release from SPR, and although it will not solve all problems, it may send WTI crude to the $80 mark.”