Volatile oil prices poised for second monthly decline amid rising coronavirus cases

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Global oil prices moved in and out of negative territory on Friday but remained on course for a second monthly fall as rising COVID-19 cases in Europe and the United States heighten concerns over fuel consumption.

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Brent crude was down 17 cents at $37.48 a barrel by 1345 GMT after touching a five-month low of $36.64 in the previous session. The December Brent contract expires on Friday and the January contract was down about 40 cents.

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US West Texas Intermediate (WTI) crude fell 47 cents to $35.71 after dipping to its lowest since June on Thursday at $34.92. It is on track for an 11 percent monthly decline while Brent heads for an 8 percent drop.

Prices had swung between slightly positive territory and a more than 2 percent decline during Friday’s session, with the market “anxious” about renewed lockdowns in Europe and the US election next week, a Singapore-based oil trader said.

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The US dollar, measured against a basket of currencies , has also strengthened this week, making dollar-denominated oil more expensive for holders of other currencies.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, had planned to raise output by 2 million barrels per day (bpd) in January.

However, top producers Saudi Arabia and Russia are in favor of maintaining the group’s current output reduction of about 7.7 million bpd into next year in the face of lockdowns in Europe and rising Libyan oil output.

OPEC+ is scheduled to hold a policy meeting over November 30 and December 1.

“The outcome has the potential to send oil prices $10/bbl in either direction,” PVM analysts said of the meeting.

Governments across Europe imposed fresh restrictions this week to curb the spread of the coronavirus, with Germany saying its economy will not fully recover before 2022.

While that has reduced mobility and fuel consumption within Europe, demand in the United States is holding up for now, RBC Capital’s Mike Tran said in a note.

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