Oil falls amid rising COVID-19 cases, U.S. election uncertainty
Oil fell more than 1% on Friday as new lockdowns in Europe to halt surging COVID-19 infections sparked concern about the outlook for demand, while markets remained on edge over drawn-out vote counting in the U.S. election, Reuters reports.
West Texas Intermediate (WTI) futures CLc1 were down 52 cents, or 1.3%, at $38.27 a barrel at 0749 GMT, while Brent crude LCOc1 was 48 cent, or 1.2%, lower at $40.45. Both contracts fell more than $1 earlier in the day.
Still, Brent crude is poised for a 7.8% gain this week, while WTI is set to climb 6.9%.
The European Union’s executive commission also cut its economic forecast and predicted the bloc won’t see a rebound to pre-virus levels until 2023.
Vote counting and trends from the U.S. election point to the Republicans retaining control of the Senate, while Democrats are expected to take a slimmed majority in the House of Representatives, dashing hopes for a large stimulus package, another factor weighing on oil.
President Donald Trump, without providing evidence, late on Thursday said he would win the election if “legal” votes were counted, the latest effort to cast doubt on counting now heading for a third day.
The Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, is expected to delay bringing back 2 million barrels per day of supply in January, given the decline in demand from new COVID-19 lockdowns.
Providing some support for the market, U.S. inventories of crude oil plunged last week, although much of the fall was attributed to production being shut down as another hurricane swept through the Gulf of Mexico.
Stockpiles fell by 8 million barrels in the week to Oct. 30, against analyst expectations of a rise of nearly 900,000 barrels.