Oil prices fell on Tuesday as tighter lockdowns in Europe and a forecast for a slower recovery in demand next year outweighed relief from vaccination rollouts and concerns about a flare-up of tension in the Middle East.
U.S. West Texas Intermediate (WTI) crude futures fell 36 cents, or 0.8%, to $46.63 a barrel at 0506 GMT, while Brent crude futures fell 40 cents, or 0.8%, to $49.89 a barrel, erasing Monday’s gains.
London stepped up restrictions requiring bars and restaurants to close, as Covid-19 infection rates continued to rise sharply, which will dent fuel demand in the near term.
Further marring the demand outlook, Italy said it was considering more stringent restrictions over the Christmas holidays, while most stores in Germany have been ordered to shut until Jan. 10, with little prospect of an easing early in the new year.
OPEC on Monday pared its forecast for a recovery in oil demand in 2021 by 350,000 barrels per day, due to the persistent impact of the pandemic, but said a rapid rollout of vaccines in major economies “provides potential upside for next year’s growth forecast.”