Brent drops over 2% as Covid-19 infections rise in China

Brent Crude prices continued to fall as the US market opened on Monday, and pulled back from an 11-month high on profit-taking and renewed concerns about demand in China, after the country reported the largest daily increase of Covid-19 infection in more than 5 months.

Brent crude fell 2.2% to $55.02 a barrel, after opening at $56.26, and hit a high of $56.32.

Brent crude futures gained 3.3% on Friday and posted the fourth straight daily gain.

Oil prices gained around 9% during the past week, and posted the first weekly gain in three, and the largest gain since early October.

This largest weekly gain in four months came thanks to Saudi Arabia's pledge to cut its oil output during the next two months, and after US oversupply concerns faded thanks to a drop in the US crude inventories.

Saudi Energy Minister, Abdelaziz bin Salman said that his country would voluntarily cut its production by 1 million barrels per day in February and March to balance the market.

The total US commercial inventories fell to 485.3 million barrels during the week ending January 1, the lowest level since the week ending October 30, which is considered a positive sign of the US domestic demand.

The National Health Commission of China said on Monday reported the largest daily increase in new Covid-19 cases in more than 5 months, especially as new infections continued to rise in Hebei Province that borders the capital, Beijing.

In Shijiazhuang, the epicenter in Hebei, the authorities imposed a lockdown on the city and prevented people and vehicles from leaving to curb the spread of the virus.

Most European countries are now under the strictest lockdown since the first coronavirus wave , according to the Oxford Covid-19 Government Response Tracker, which tracks and compares worldwide travel bans and closures of schools and workplaces.