Oil prices slip on demand worries

Gulf Today Report 

Oil prices decline on Thursday regardless of the drop in US crude stock as the dollar gains momentum and strength in fresh fuel demand affected prices.

US West Texas Intermediate (WTI) crude futures fell 33 cents, or 0.62%, to $52.52 a barrel while Brent crude futures fell 36 cents, or 0.65%, to $55.45 a barrel, after losing 10 cents on Wednesday.

 An unexpected decline in US crude stockpiles has supported the oil market earlier in the week.

However, markets are worried about demand due to the surge in COVID-19 cases, a slower rollout of vaccines in Europe and travel restrictions in various countries. 

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Stephen Innes, chief global market strategist at Axi said: "We are moving from just a Q1 demand write off to now pricing in more demand pain in Q2 due to the slow vaccine rollout."

Adding to the demand worries, China, the world's second-largest oil consumer, is now facing a surge in coronavirus cases and seeking to limit travel as it heads into what is normally the busiest travel season of the year, the Lunar New Year holiday.

 "China - they were the ones supporting the market. If you have issues forming in China, that really puts a brake on the demand story for now," said Commonwealth Bank Commodities Analyst Vivek Dhar.