Oil prices drop as coronavirus lockdown worries offset demand hopes

Oil prices fell for a second consecutive session on Monday as replaced COVID-19 restrictions raised new worries about global oil demand. 

Brent crude futures for March delivery slid 0.1%, or 8 cents, at $55.38 per barrel. U.S. West Texas Intermediate crude for March was down 1 cent to $52.26 per barrel.

China posted a rise in new coronavirus infections on Monday, affecting demand prospects in the world’s biggest energy consumer.

Prices fell under pressure last Friday as U.S. crude stockpiles reported a sudden 4.4-million-barrel rise in the week ended Jan. 15, contrary to expectations for a 1.2-million-barrel drawdown.

Oil and natural gas rigs rose for a ninth consecutive week in the week ended Jan. 22 but remained below 52% year-on-year. 

Support for oil prices in recent weeks came from Saudi’s pledge for additional output cuts. However, traders are keeping an eye on resumed talks between Iran and the United States, which could result in Washington lifting sanctions on Tehran’s oil exports.