Crude oil prices fell sharply on Thursday amid concerns over the outlook for energy demand due to a continued surge in coronavirus cases and tighter lockdown measures in several countries.
West Texas Intermediate Crude oil futures for December ended down $1.22 or about 3.3% at $36.17 a barrel, the lowest settlement in nearly five months.
Brent crude futures were lower by $1.25 or 3.1% at $38.39 a barrel.
Both WTI futures and Brent futures contracts tumbled by over 5% in the previous session.
Recent data from the Energy Information Administration showing crude inventories in the U.S. to have increased for the first time in three weeks. Increased output from Libya also weighed on oil prices.
Additionally, with several countries in Europe, including the U.K., France, Germany and Spain, tightening lockdown measures and several states across the U.S. seeing spikes in coronavirus cases, the demand for energy is likely to take a downturn in the near term.
German Chancellor Angela Merkel on Wednesday announced plans to begin a ‘lockdown light’ from November 2 to limit contact as much as possible and stem the rapid spread of the virus.
France is set to go into a second national lockdown beginning at midnight tonight, while the British government is under pressure to develop a national strategy to combat the virus surge and “rescue Christmas.”
The World Health Organization said for the second consecutive week, the European region accounted for the biggest proportion of new infections, with more than 1.3 million cases or about 46% of the worldwide total.
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