Oil fell on Thursday on higher inventories in the U.S. and spread of Covid among Chinese passengers

West Texas Intermediate (WTI) fell 2.8% on Thursday, hitting $78 per barrel. U.S. black gold inventories have risen by 718,000 barrels over the past week. 

The United States is going to require air passengers from China to submit negative tests for COVID-19. Italian authorities also plan to introduce testing for tourists coming from Asian countries. These factors weaken market expectations for the oil demand recovery in China. 

Trading volumes have been relatively modest this week. Therefore, oil prices may be close to the second quarterly loss in a row. The last time this drop took place was in 2019. 

Craig Erlam, chief analyst at Oanda, believes that volatility is probably going nowhere, as there is still an extremely uncertain year ahead. However, many surprises and market turns are predicted along the way.