Oil prices drop to one-week low amid declining output in China

Crude oil prices dropped by a week low amid a decline in refining output in China and fresh outbreaks in COVID-19.

Brent, the global oil benchmark, fell by three percent to $68.38 per barrel this afternoon, dropping for a fourth session since Wednesday when it traded at $71.44.

U.S. West Texas Intermediate (WTI) crude fell by $2.42, or 3.5%, to $66.02.

Last week, the United States called on the Organisation of Petroleum Exporting Countries and its allies known as OPEC+ to increase oil production to return oil prices to pre-pandemic levels. 

In July, China’s crude oil processing fell to the lowest level daily since May 2020.

This occurred as independent refiners cut production in the face of tighter quotas, elevated inventories and falling profits.

In June, Brent crude crossed the $75 mark, its highest level since April 2019, granting a potential boost to Nigeria’s oil export revenue and headache for subsidy payment.

Less than a month later, oil climbed $77.78 per barrel — the highest since October 2018.

But the spread of the COVID-19 Delta variant globally has created more speculation for falling oil prices.

Experts posit that the spread of the virus in China and renewed lockdown measures implemented in several Chinese cities will impact oil demand and weigh on prices.