China tells citizens not to travel for Lunar New Year, sparking worry in oil market

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The latest Covid-19 outbreak is the largest in months and started in the province of Hebei that surrounds Beijing

Chinese workers wait to receive a COVID-19 vaccine jab at a mass vaccination center for Chaoyang District on January 15 2021 in Beijing, China. Picture: GETTY IMAGES/KEVIN FRAYER

People are being encouraged to remain in their cities to prevent the spread of the coronavirus, with some provinces offering cash incentives, or hongbao, and food vouchers to those who choose to stay home. China State Railway Group cut its estimate for the number of travellers over the festive period to 296-million from 407-million amid low train ticket bookings, Xinhua news agency reported. While it’s a significant drop, it’s still higher than 2020.

Hundreds of millions of Chinese typically travel during the Lunar New Year period, crowding trains and airports as they return to their hometowns for the festivities. The ministry of transport expects a significant drop in travellers over the 40-day period from January 28 to March 8, with commuters shunning long-distance bus rides in favour of other options such as private cars.

Oil markets have recently weakened despite Saudi Arabia’s move to deepen output curbs over the next two months, a timeline that overlaps with peak refinery maintenance in Asia. March-loading cargoes of Russian ESPO crude traded at a premium of $1 to $1.20 a barrel against the Dubai benchmark this week, down from $2.90 to $3.50 agreed to in December.

 

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