Oil Declining as Covid-19 Cases Rise And Vote Count Continues in America

US oil fell more than 2% on Friday, as new lockdown measures in Europe to stem the rise in Covid-19 cases fueled concerns about the outlook for demand, while markets remain in a state of tension due to the long-running US election counting.

West Texas Intermediate crude fell $ 1.06, or 2.7%, to $ 37.73 a barrel, after dropping 0.9% on Thursday. Brent crude fell $ 1.05, or 2.6%, to $ 39.88, after falling 0.7% in the previous session.

Italy recorded the largest daily number of infections on Thursday, and cases rose by at least 120,276 cases in the United States, which is the second highest daily record in a row as the outbreak spreads across the country.

The European Commission also lowered its economic outlook, predicting that the European Union will not see a recovery to pre-virus levels until 2023.

The counting and trends of votes in the US elections shows that the Republicans will retain control of the Senate, while the Democrats are expected to obtain a slim majority in the House of Representatives, which dampens hopes for a big stimulus boot, which is another factor that puts pressure on oil.

President Donald Trump said without providing evidence late on Thursday that he would win the election if the “legal” votes were counted, in the latest effort that casts doubt on the now-continuing tally for the third day.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, in what is known as the OPEC+ group, are expected to delay the return of two million barrels per day of supplies in January, given the decline in demand due to the new isolation measures linked to Covid-19.

The market received some support, as US crude oil inventories fell last week, although most of the drop was attributed to the halt in production as another hurricane swept across the Gulf of Mexico.