Oil Fell on Rising in Covid-19 Cases And Strong Dollar

Oil prices fell, as they were negatively affected by fears that a significant increase in the number of cases of Covid-19 in Europe and the United States was curbing demand in two of the largest fuel-consuming regions in the world, while the strength of the US dollar added more pressure on prices.

Brent crude futures for December delivery fell 38 cents, or 0.9%, to $ 42.78 a barrel with the opening of European markets, while US West Texas Intermediate crude futures for November delivery fell 35 cents, or 0.9%, to $ 40.61 a barrel.

The two benchmarks fell slightly the day before but were almost unchanged compared to last week.

In Europe, some countries have re-imposed curfews and general isolation measures to cope with a significant increase in new infections with the Coronavirus, while Britain imposed tighter restrictions to curb the spread of Covid-19 in London today.

Oil also declined as the dollar headed for its best weekly performance this month today, as a rise in virus infections and stalled progress towards US stimulus caused anxious investors to seek to buy safe assets.

Dollar-denominated oil tends to decline when the dollar rallies as fuel purchases by buyers paying in other currencies become more expensive.

A technical committee of the Organization of the Petroleum Exporting Countries (OPEC) and allies of oil producers, the group known as OPEC +, ended their meeting on Thursday and expressed concern about rising oil supplies as social restrictions to curb Covid-19 limit fuel consumption.

OPEC is set to slash existing supply cuts of 7.7 million bpd by 2 million bpd in January, even as OPEC Secretary-General Mohamed Barkindo admitted that demand for fuel appears weak.

Sources at OPEC + told Reuters that negative demand forecasts and higher supplies from Libya may mean that OPEC may extend existing cuts in the next year.

A meeting of OPEC + is scheduled to take place on November 30 and December 1 to set policies.