Oil prices fell on Thursday despite calm trading with US crude extending losses as Covid 19 infections spread in China.

Chinese authorities extended its range of restrictions and closures on major cities, including Shanghai. 

Health authorities also recorded over 33 thousand infections in a single day in China, the world's largest crude oil consumer. 

However markets remain mostly calm amid the Thanksgiving holiday, as US markets close, both bonds and stocks.

For the time being investors will assess latest Fed statements and the latest meeting minutes to gauge next steps. 

US crude futures due in January fell 0.3% to $77.7 a barrel as of 16:23 GMT. 

Brent January futures fell 0.8% to $84.7 a barrel. 

US stock indices closed today for the Thanksgiving official holidays with the bonds markets closed as well.

Wall Street will reopen tomorrow on Friday with investors assessing monetary policies in upcoming months. 

Oil prices fell in European trade on Thursday for another session, almost hitting 10-month lows amid mounting dispute between EU countries on price ceilings for Russian crude.

Such considerations overcame recent US data that showed a larger than expected inventory drawdown in crude stocks last week.

Global Prices

US crude fell 0.6% to $76.97 a barrel, with a session-high at $78.18, while Brent declined over 0.5% to $84.09 a barrel. 

US crude lost 4.5% on Wednesday, while Brent declined 4.4%, resuming the losses after a short hiatus.

European Dispute 

Talks among European countries on putting a price ceiling for Russian crude are hindered with government split on how to design the plan.

The executive branch of the EU suggested putting the ceiling at $65, with Poland and the Baltic countries considering it too generous. 

Other countries with large shipping industries like Greece and Malta refused to push prices below $70, which was the upper limit imposed by the EU earlier this week.

US Stocks 

The Energy Information Administration reported a tumble in US crude stocks by 3.7 million barrels to 431.7 million barrels, while analysts expected a drop of 2.5 million barrels.

Gasoline stocks rose 3.1 million barrels to 211 million barrels, while distillate stocks rose 1.7 million barrels to 109.1 million barrels.

Dollar fell in European trade against a basket of major rivals, sharpening the decline for the third straight session and almost hitting three-month lows amid renewed selloff pressures on the currency following weak US data and Fed's minutes. 

It's now clear that Fed members are preparing for a slower pace of rate hikes, paving the way for a 0.5% rate hike in December.

The Index

The dollar index fell 0.4% to 105.63 with a session-high at 106.07, while closing 1% lower yesterday, the second loss in a row, with the index approaching recent three-month lows at 105.34. 

Weak Data

Recent US data showed industrial activities slowed down sharply for the first time in 2-1/5 years as increased interest rates hampered new orders.

The data overall showed a decline in services and industrial activities in November for the fifth month in a row, a sign of recession.

The Fed

Fed's minutes yesterday showed US policymakers are content about the slowdown in inflation, and are moving toward smaller rate hikes.

Fed Rates

Chances of a 0.5% rate hike rose from 75% to 85%, while chances of 75% rate hike fell from 25% to 15%.