By Shariq Khan
NEW YORK (Reuters) -Oil prices fell by more than a dollar on Thursday, as more countries consider restrictions on Chinese travelers, raising concerns over demand during uncertainty about COVID-19 infections spreading in China.
Conflicting headlines about demand from top oil importer China have buffeted traders in recent weeks. While China’s government is dismantling pandemic restrictions, a surge in infections there is prompting some countries to enact travel rules on Chinese visitors.
Brent crude futures for February delivery fell by $1.06, or 1.3%, to $82.20 a barrel by 11:52 a.m. EST [1652 GMT]. The more actively traded March contract was down about 1.4%.
The U.S. West Texas Intermediate crude futures for February delivery were down $1.13, or 1.4%, to $77.83 a barrel.
Britain is reviewing whether to impose restrictions on people arriving from China, while the United States, Japan, India and Taiwan have already imposed testing on arrivals from the country.
Both oil contracts dipped more than 2% earlier in the session, but pared losses as the U.S. dollar slipped, with investors on edge at the end of the year as initial optimism over China’s reopening fizzled.
A weaker dollar makes oil cheaper for holders of other currencies and can boost demand.
“With so many moving parts, I don’t think anyone can say anything with any strong degree of conviction,” Craig Erlam, senior market analyst at OANDA, said. “OPEC+ could make an announcement at any point and suddenly everything changes. Not to mention Russia’s war in Ukraine and how that develops.”
Russia fired scores of missiles into Ukraine early on Thursday, targeting Kyiv and other cities in one of Moscow’s largest aerial assaults since the war started.
Oil prices also gained some support after inventories update for last week from the U.S. Energy Information Administration.
Despite a surprise build in crude oil stocks, the report itself was positive, said Giovanni Staunovo of Swiss bank UBS, adding it showed a solid rebound in implied oil demand, resulting in large draws of refined products last week. [EIA/S]
(Reporting by Shariq Khan; additional reporting by Rowena Edwards and Jeslyn Lerh; Editing by Chizu Nomiyama, Emelia Sithole-Matarise, Josie Kao and Leslie Adler)
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