Oil Falls on Worries About Weak Demand And COVID-19 Vaccine

Oil prices fell on Tuesday, November 10 as concerns about short-term fuel demand in Europe and the United States, affected by the Coronavirus, chased the market after an overnight rally led by encouraging news about a vaccine for Covid-19.

US West Texas Intermediate crude futures fell 55 cents, or about 1.4%, to $ 39.74 a barrel by 05:45 GMT, while Brent futures fell 44 cents, or 1%, to $ 41.96 a barrel.

The two benchmark contracts jumped 8% on Monday, in their biggest daily gain in more than five months, after Pfizer and Biontech, the pharmaceutical industry, announced that their experimental vaccine for treating Covid-19 disease was more than 90% effective based on the results of initial trials. But distributing the vaccine in large numbers is likely to take months and is subject to regulatory approval.

The American Petroleum Institute is due to release crude stockpile data on Tuesday, and the US Energy Information Administration will release data on Wednesday.

The decline in oil prices today was tempered by comments by the Saudi Energy Minister, who said on Monday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, may amend their agreement to reduce supplies if demand falls before the vaccine becomes available.

OPEC+ agreed to cut supplies by 7.7 million barrels per day from August to September and to ease the reduction to 5.7 million barrels per day from January.