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Oil falls as China’s rising COVID cases renew fuel demand concerns

The sticker reads Crude Oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant

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MELBOURNE, July 18 (Reuters) – Oil prices fell $1 in early trade in Asia on Monday, paring gains from Friday as attention returned to China’s rising COVID-19 cases and the prospect of lockdowns , which will again reduce fuel demand in the world top oil importing nation.

US West Texas Intermediate (WTI) crude oil futures for August delivery fell $1.54, or 1.6%, to $96.05 a barrel by 0055 GMT after rising 1.9% on Friday.

Brent crude futures for September settlement fell $1.47, or 1.5%, to $99.69 a barrel, up 2.1% from Friday.

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China, the world’s second-biggest oil consumer, on Sunday reported 691 new COVID cases for Saturday, up from 547 the previous day, with locally transmitted cases the highest since May 23. Read more

“Oil starts the week weaker as the market digests the demand impact of the surge in new COVID cases in China and the market cautiously awaits the monumental event risk when Nord Stream 1 gas flow from Russia to Europe resumes later this week. said Stephen Innes, Managing Partner at SPI Asset Management.

The Nord Stream 1 pipeline, the largest system transporting Russian natural gas to Germany, began annual maintenance on July 11, as the past 10 days had passed. Governments, markets and companies fear the shutdown could be extended because of the war in Ukraine. Continue reading

A loss of this gas would hit Germany, the world’s fourth largest economy, hard and increase the risk of a recession.

As expected, US President Joe Biden’s trip to Saudi Arabia failed to bring a commitment from the top OPEC producer to boost oil supplies. That expectation of no additional oil helped push prices higher last Friday ahead of Biden’s talks with Saudi Crown Prince Mohammed bin Salman. Continue reading

Biden wants Gulf oil producers to ramp up production to tame oil prices and lower inflation.

On Sunday, Amos Hochstein, a senior adviser to the US State Department on energy security, told CBS’s Face the Nation that the trip would result in oil producers taking “a few more steps” in terms of supply, though he didn’t said which country or countries would increase production. Continue reading

The next meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively referred to as OPEC+, on August 3 will be closely watched as their existing stimulus pact expires in September.

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Reporting by Sonali Paul in Melbourne; Edited by Christian Schmollinger

Our standards: The Thomson Reuters Trust Principles.

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