Global oil prices plunged moderated as supply issues in coronavirus-hit countries eased, and market players took into consideration the possible impact of new outbreaks in China.
- Futures of the West Texas Intermediate dropped by as much as 1.4%, falling 78 cents a barrel to $78.12 a barrel at 10 a.m. in New York. Brent futures for March fell 87 cents to $80.88 a barrel.
- The decline is attributed to the stronger dollar, reducing the appeal of commodities priced in the greenback. It also comes as Libyan production grew to 900,000 barrels a day following the completion of the pipeline maintenance.
- Trades are also weighing in developments in China, the biggest oil importer, where COVID-19 outbreaks continue to be reported. It has implemented mass testing in Tianjin City in a bid to prevent the further spread of the more transmissible variants.
Crude opened the year with a strong performance, driven by a more positive outlook on global demand and the continued supply chain constraints.