Oil falls as geopolitical tensions ease

On Thursday, oil prices fell for the second day since the beginning of Asian trade. The decline in oil prices is explained by the fact that fears about geopolitical tensions have eased. At the same time, the rise in the number of cases of COVID-19 in China has increased concerns about the demand for oil from its largest importer in the world.

News of the resumption of Russian oil supplies via the Druzhba pipeline to Hungary and decrease in concerns of an escalation of conflict in Eastern Europe after NATO's statement on Wednesday put pressure on crude oil prices.

More oil is expected to flow into the United States as TC Energy lifted a force majeure on its 622,000 bpd Keystone pipeline, Reuters reported.

According to Stephen Innes, managing partner at SPI Asset Management, concerns about demand weakness in China are also helping to keep markets in place. These concerns are also supported by the fact that the company continues to report new COVID-19 cases in China’s major cities.

Although the number of coronavirus cases in China is low compared to the rest of the world, the country has a strict policy to eliminate cases and prevent further spread of COVID-19.