Oil prices slide as coronavirus cases spike in US, Europe along with strong dollar

Oil prices fell on Friday, dragged down by concerns that a spike in COVID-19 cases in Europe and the United States is curtailing demand in two of the world’s biggest fuel consuming regions, while a stronger US dollar also pressured prices.

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Brent crude futures for December dropped 60 cents, or 1.4 percent, to $42.56 a barrel by 1017 GMT and US West Texas Intermediate (WTI) crude futures for November delivery slid 51 cents, or 1.3 percent, to $40.45.

Both benchmarks dipped the previous day but remain barely unchanged from a week earlier.

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“The reality is that we’re now seeing a pretty active spread of the pandemic across Europe and it’s spreading again in North America, and that potentially will weigh on oil demand recovery,” said Lachlan Shaw, head of commodity research at the National Bank of Australia.

Some European countries were reviving curfews and lockdowns to fight a surge in new coronavirus cases, with Britain imposing tougher COVID-19 restrictions in London on Friday.

“Although we are unlikely to enter such deep lockdowns as in the pandemic’s first wave, we still see restrictions, and they do have an effect in every aspect of our lives, including fuel consumption,” said Rystad Energy analyst Paola Rodriguez-Masiu.

Crude also fell as the dollar headed towards its best week of the month.

A technical committee of the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers, a group know as OPEC+, ended their meeting on Thursday expressing concerns about a weak demand outlook.

OPEC+ is set to ease its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd in January.