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Oil prices down over weak demand fears

Many European countries impose either strict restrictions, night curfews or lockdowns, fueling investor oil demand concerns

ANKARA:

Oil prices fell slightly on Friday over demand fears caused by rising coronavirus cases after Brent settled above $51 for the first time since March on vaccine optimism.

International benchmark Brent crude was trading at $51.23 per barrel at 0716 GMT for a 0.52% decrease after closing Thursday at $51.50 a barrel.

American benchmark West Texas Intermediate (WTI) was at $48.20 a barrel at the same time for a 0.33% decrease after ending the previous session at $48.36 per barrel.

Brent oil averaged $51 on Thursday, reaching its highest level since March 5 at $52.04. However, lingering fears that rising coronavirus cases worldwide, along with tightening mitigation measures and lockdowns in several European countries, are keeping demand weak and economic activities slow is exerting upward oil price pressure.

While the number of cases worldwide is now close to 75 million, the measures that countries are imposing vary from strict lockdowns to night-time curfews.

The Netherlands, the UK, Italy and the Czech Republic declared restrictions on large gatherings and the closure of non-essential businesses, while Germany entered into a strict lockdown and France declared night curfews from 8.00 pm to 6.00 am.

According to data from Johns Hopkins University on Friday, the US, the world’s largest oil-consuming country, still tops the number of cases above 17.2 million, while in India cases have reached over 9.9 million, and Brazil follows with over 7.1 million.

However, positive vaccine developments continue to support prices.

An outside advisory panel on Thursday recommended the US Food and Drug Administration (FDA) authorize the use of Moderna’s COVID-19 vaccine.

If approved, Moderna’s vaccine will be the second coronavirus vaccine in the US after the Pfizer/BioNTech vaccine, which the FDA authorized last week.

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