Oil futures traded sharply lower Friday, with U.S. prices set to erase their gain for the week, as investors weighed news of fresh COVID19 outbreaks in China, which has been an engine of demand as other major economies were slowed by the coronavirus pandemic.
Oil market euphoria is unequivocally strong, but market indicators from Asia are mixed, said Michael Tran, analyst at RBC Capital Markets, in a note.
China, the global engine of oil demand growth, is wrestling with fresh COVID outbreaks and lockdowns in various regions throughout the country have led to a tapering in discretionary driving patterns, he said.
Barrons reported that China saw 107 locally transmitted cases of coronavirus on Wednesday, according to its National Health Commission, the most since July. On Tuesday, it saw 85 cases. Although the numbers seem small compared with large daily tallies in the thousands in the U.S. and elsewhere, they come after China went for a long stretch with few outbreaks following a hard lockdown last year.
Ninety percent of the new cases are in Hebei province, which encircles Beijing, prompting a quick lockdown that has led to 28 million people under home or hotel quarantine, the commission said.
The global tally for confirmed cases of the coronavirus that causes COVID19 climbed above 93 million on Friday, according to data aggregated by Johns Hopkins University, while the death toll rose above 1.99 million. The U.S. has the highest case tally in the world at 23.3…