WTI prices, wavering below $79 on concerns about China

Crude oil prices are trading sideways in a range between $77 and $79 for the second consecutive day, with investors increasingly wary about the surging COVID-19 infections in China and its consequences for the global economy.

Concerns about the outlook of oil demand are weighing on prices

Investors' optimism about the decision of the Chinese Authorities to lift the restrictions on inbound travelers faded in the second half of the week as news from China cast a shadow over hopes of a strong economic recovery in the Asian Country.

Furthermore, most of the major world economies have announced mandatory coronavirus tests for all arrivals from China, which is adding woes to the outlook for crude oil demand.

On Thursday, the United States Energy Information Administration (EIA) announced a 0.718 million increase in US oil stocks, in the week of December 23. These figures confront the market consensus of a 1.53 million barrels decline and have added bearish pressure on oil prices.

Oil prices, barely changed in the year

Crude prices are on track to end the year near the levels of early January. The sharp oil rally seen after Russia invaded Ukraine, which pushed the WTI barrel to levels neat $127, lost steam in the second half of the year.

The high energy cost, which has boosted inflation to its highest levels in decades has triggered concerns about a global economic slowdown which are being exacerbated by the recent coronavirus outbreak in China.

Technical levels to watch