West Texas Intermediate fell 2.4 percent to trade near USD 77 a barrel. The US will require airline passengers from China to show negative virus tests, while Italy will begin testing travelers from the Asian nation upon arrival.

That’s overshadowing optimism about a longer-term demand recovery in China.

“The removal of travel restrictions could precipitate another global outbreak,” said John Driscoll, director of JTD Energy Services Pte. 

“It raises the potential of a demand hit and flattening prices.”

Trading volumes have been thin this week, with the holiday period between Christmas and New Year curtailing activity. An industry report on Wednesday showed a decline in US crude inventories, with government data due later on Thursday.

Crude is heading for the first back-to-back quarterly loss since 2019 after a volatile year that saw futures surge following Russia’s invasion of Ukraine before retreating as concerns over a global economic slowdown mounted.

Kremlin bans export to countries with price cap on Russian oil

Japan set to import first crude shipment from Russia since May