Oil prices fall as spike in Covid-19 cases prompts lockdowns

7 December 2020 (Last Updated December 7th, 2020 11:53)

Oil prices have edged-down after highs over the last few months as a continued surge in Covid-19 infections across the world led to more lockdowns.

Oil prices fall as spike in Covid-19 cases prompts lockdowns
Last week, both the Brent and the WTI benchmarks rose for a fifth consecutive week. Credit: SatyaPrem from Pixabay.

Oil prices have edged-down after highs over the last few months as a continued surge in Covid-19 infections across the world led to more lockdowns.

However, further losses were restricted by China’s demand recovery and developments in Covid-19 vaccines.

Brent crude futures were down by $0.21 to $49.04 a barrel, while the US West Texas Intermediate (WTI) crude futures fell $0.25 to reach $$46.01 a barrel, Reuters reported.

Last week, both the Brent and the WTI benchmarks rose for a fifth consecutive week.

OANDA senior market analyst Edward Moya was quoted by the news agency as stating: “Crude pared earlier vaccine roll-out gains after Los Angeles county had another record high in coronavirus cases and South Korea raised their alert level.

“Covid restrictive measures and lockdowns across the globe seem poised to keep crude prices heavy in the short term.”

Strict new measures in southern California in the US, one of the world’s top oil consumers, has called for bars, salons and tattoo shops to close again.

On 6 December, the southern German region of Bavaria said it would impose a stricter lockdown from 9 December until 5 January.

Meanwhile, South Korean authorities increased social distancing rules for areas in and around its capital city Seoul. These rules are expected to last until the end of the month.

Iran state media reported that the country had instructed its oil ministry to prepare installations for production and crude oil sale at full capacity over the next three months.

Moya added: “Adding to the pressure on oil prices is the potential Iranian increase to production in three months. Iran is optimistic the US will ease restrictions if they return back to the 2015 nuclear deal.”