Oil drops as China fuel demand falls on looming COVID-19 lockdown concerns

Oil prices decreased on Thursday as declining fuel demand in China due to the spread of COVID-19 eased supply concerns.

International benchmark Brent crude cost $103.27 per barrel at 0600 GMT for a 1.60% decrease after closing the previous session at $104.95 a barrel.

American benchmark West Texas Intermediate (WTI) traded at $100.44 per barrel at the same time for a 1.55% fall after the previous session closed at $102.02 a barrel.

The drop in oil prices was triggered by lockdowns in the world's largest importer, China, meaning less fuel demand while relieving pressure on global supply and demand.

China continues to battle with COVID-19, risking further lockdowns in other major cities.

Shanghai has been in quarantine since the beginning of March, but the possibility of the virus spreading to Beijing, a city with a population of more than 21 million, has been raised, along with the possibility of Shanghai-like closures.

The Beijing Center for Epidemic Control and Prevention reported that one region where new cases were detected had been declared high risk, while seven regions had been designated medium risk.

Additionally, data showing an increase in US commercial crude oil inventories by 700,000 barrels to 414.4 million barrels last week also contributed to lowering prices.