Oil declined for a second session as rising Covid-19 cases threatened to derail demand with tougher restrictions in major US cities on the horizon.
Futures fell 2.4% in New York on November 13, but still posted the largest weekly gain in a month as optimism from news of a potential Covid-19 vaccine breakthrough jolted markets earlier in the week. Despite the measure of hope for the long-term, US cities from the West to East coasts have imposed stricter measures to slow surging case counts, raising concerns that the virus will further crimp demand for fuel. Gasoline futures also slumped.
“In the US, the virus spread is exponential and right now many states are probably going to be forced to deliver stricter measures and return to lockdowns,” said Edward Moya, a senior market analyst at Oanda Corp. “That’s going to cripple economic activity and put further pressure in the short-term as far as the crude demand outlook goes.”
Before concerns over lockdowns set in, futures also got support from signs the Opec+ alliance is inching closer to delaying an output rise in January.