Oil prices fell today as a stronger dollar, fears over soaring Covid-19 cases around the world and the slow pace of vaccination against the virus outweighed a better-than-expected quarterly rebound for China's economy.
Brent crude was down 24 cents, or 0.4%, at $54.86 per barrel this afternoon, and West Texas Intermediate US crude fell 10 cents, or 0.2%, to $52.26.
The benchmarks had rallied in recent weeks, buoyed by Covid-19 vaccine rollouts and a surprise cut of output by Saudi Arabia. However, the slow pace of vaccination has raised doubts over how soon economies could recover.
A UK official said Britain's vaccine rollout was limited by a "lumpy" manufacturing process, and Pfizer said it was distributing fewer doses in Europe in January than originally contracted.
The US dollar strengthened for a third consecutive day today to a four-week high, weighing on crude prices.
Oil is usually priced in dollars, so a stronger greenback makes crude more expensive for buyers with other currencies.
Security concerns ahead of this week's US presidential inauguration are also dragging on investor sentiment, said PVM Oil analyst Tamas Varga.
"In addition to the coronavirus running amok, this week’s tense presidential inauguration can also cause unease amongst investors," he said.
Oil prices clawed back some losses after Chinese data showed the economy of the world's biggest oil importer picked up speed in its recovery from the coronavirus pandemic.
Prices also found support in a drop in Libyan oil output, with Waha Oil Company reducing production by up to 200,000 barrels per day because of maintenance on the main pipeline that links the Al-Samah and Al-Dhahra oilfields to Es Sider port.
