Brent crude fell 45 cents, or almost 1 per cent, to $54.65 a barrel by 0207 GMT, after dropping 2.three per cent on Friday. U.S. oil was down by 43 cents, additionally almost 1 per cent, at $51.93 a barrel, having declined 2.three per cent within the earlier buying and selling session.
The benchmarks had rallied in latest weeks, buoyed by the beginning of COVID-19 vaccine rollouts and a shock reduce of crude output by the world’s largest oil exporter, Saudi Arabia. Surging new infections all through the world, nonetheless, have raised doubts about how lengthy demand would maintain up.
U.S. drillers added additional strain by placing extra oil and pure fuel rigs to work for an eighth consecutive week final week as a result of rising costs have made manufacturing extra worthwhile. Nonetheless, the variety of working rigs is lower than half of the extent of a 12 months in the past.
“Shale producers have indicated they are going to proceed to maintain their spending beneath management,” ANZ Analysis stated in a word. “The economics additionally do not favour a surge in drilling, with half of the trade nonetheless uneconomical.”
U.S. shale producers have rapidly responded to market features lately, profitable market share as Saudi Arabia and different main producers corresponding to Russia have reduce manufacturing in an try and help world oil and fuel costs.
In China, the place new COVID-19 infections have been rising, greater than 28 million persons are in lockdown as Beijing tries to keep away from a resurgence of the coronavirus within the nation the place it was first found.