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UPDATE 7-Oil falls on China's COVID-19 cases, high crude build

CoronavirusJan 22, 2021 18:54
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* Shanghai reports first locally transmitted cases in 2
months
* U.S. crude inventories rise by 4.4 million barrels
* Vaccine-fueled recovery likely several months away

(Updates byline, dateline (previous LONDON), prices, market
activity, adds commentary)
By Laura Sanicola
NEW YORK, Jan 22 (Reuters) - Oil prices fell on Friday,
weighed down by a build in U.S. crude inventories and worries
that new pandemic restrictions in China will curb fuel demand in
the world's biggest oil importer.
Brent crude LCOc1 futures declined 60 cents, or 1.1%, to
$55.50 a barrel by 11:58 EDT (1658 GMT).
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell
68 cents, or 1.3%, to $52.45.
Overall U.S. crude inventories surprisingly rose by 4.4
million barrels in the most recent week, versus expectations for
a draw of 1.2 million barrels.
Recovering fuel demand in China underpinned market gains
late last year while the United States and Europe lagged, but
that source of support is fading as a fresh wave of COVID-19
cases has sparked new restrictions. Travel on U.S. roads fell 11% in November, a steeper decline
over October road use as coronavirus cases increased, the U.S.
Transportation Department said Friday.
"The pandemic seems to continue to expand into a second wave
in China, with infections rising by the day and reaching again
different regions such as Shanghai," said Rystad Energy oil
markets analyst Louise Dickson.
U.S. crude inventory data showed signs of strength in
domestic product demand.
While U.S. crude oil stockpiles rose unexpectedly last week,
refineries hiked output to their highest capacity usage since
March and demand for gasoline and diesel increased week on week.
"Crude oil exports did fall quite dramatically, which is the
main reason for a decent build overall in crude stocks,” said
Tony Headrick, energy market analyst at CHS Hedging.

UPDATE 7-Oil falls on China's COVID-19 cases, high crude build
 

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