Oil Falling on Demand Concerns and US Dollar Strengthened

Oil prices fell in morning trading in Asia despite a significant drop in US crude stocks, at a time when prices were under pressure due to the strengthening of the US dollar and new concerns about fuel demand due to travel restrictions and delays in the distribution of anti-Corona virus vaccines.

US West Texas Intermediate crude futures fell 33 cents, or 0.62%, to $ 52.52 a barrel, erasing gains made on Wednesday.

Brent crude futures fell 36 cents, or 0.65%, to $ 55.45 a barrel, after losing ten cents on Wednesday.

The US dollar rose in general, while its index rose to 90.753 from its low level in January of 89.206, which puts pressure on the commodities priced in dollars.

The oil market received support earlier this week due to a sudden large drop in US crude stocks in the week ending January 22, which analysts attributed to the recovery in US crude exports and the decline in imports.

But attention is now shifting to demand concerns in light of an increase in Covid-19 infections with new infectious strains, a slower pace of vaccine distribution in Europe and travel restrictions in countries such as China.

The European Union failed to achieve a breakthrough in crisis talks with AstraZeneca on Wednesday, and more comprehensive checks of vaccines are being conducted before their approval, which means a greater slowdown in the vaccination rate compared to Britain, a former member of the bloc, and growing public frustration.

Fears about demand have increased as China, the second-largest consumer of oil in the world is now facing a spike in Coronavirus cases and is seeking to limit travel as it approaches the busiest travel season of the year, which is the Lunar New Year holiday.