Oil prices fall sharply as COVID-19 cases surge, US vote drags on

OIL prices fell more than 2 per cent on Friday as new lockdowns in Europe to halt surging infections of COVID-19 sparked concern about the outlook for demand, while markets remained on edge over drawn-out vote counting in the United States presidential election.

West Texas Intermediate was down $1.06, or 2.7 percent, at $37.73 a barrel at 05:38 GMT, after dropping 0.9 percent on Thursday. Brent crude was off $1.05, or 2.6 percent, at $39.88, having fallen 0.7 percent in the previous session.

But crude prices were still up for the week, as investors watch for signs of whether the Organization of the Petroleum Exporting Countries and allies including Russia – a group known as OPEC+ – will delay easing production cuts.

Meanwhile, Italy recorded its highest daily number of infections on Thursday and cases surged by at least 120,276 in the United States, the second consecutive daily record as the outbreak spreads across the country.

“COVID-19’s rampage across Europe and the US is likely to deliver a hit to consumption,” said Jeffrey Halley, senior market analyst at OANDA.

“With no concrete evidence that OPEC+ is moving to slow or reverse the pace of production increases, the supply/demand imbalance has capped oil’s pre-election rally,” he added.

The European Union’s executive commission also cut its economic forecast and predicted the bloc will not see a rebound to pre-virus levels until 2023.

BBC

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