SULAIMANI (ESTA) — Oil prices fell sending Brent to a four-month low on Thursday as surging coronavirus infections in the United States and Europe lead to renewed lockdowns and expectations that unsteady economic demand will worsen.
Brent futures fell 24 cents, or 0.61%, to $38.88 a barrel by 0807 GMT, while U.S. West Texas Intermediate (WTI) crude fell 20 cents, or 0.53%, to $37.19.
That puts Brent on track for its lowest close and biggest daily percentage loss since June 12. WTI was on track for its lowest settle since Oct. 2 and its biggest daily percentage decline since Sept. 8.
Crude price declines mirrored downturns in other risk-asset markets, as U.S. stock indexes were all lower, with the S&P 500 .SPX down 3%.
The safe-haven U.S. dollar rose 0.5% on prospects of national lockdowns in Germany and France to fight the pandemic. The stronger dollar makes oil more expensive for holders of foreign currencies, which traders said weighed on crude prices.
The United States, Russia, France and other countries have registered record numbers of COVID-19 cases in recent days and European governments have introduced new curbs to try to rein in the fast-growing outbreaks.
Traders said crude prices were also hit by fading prospects for a quick deal on a new U.S. stimulus, and increasing oil output from Libya.
On Tuesday, U.S. President Donald Trump acknowledged that a coronavirus economic relief package was unlikely until after next week’s election.
Libya’s production is expected to rebound to 1 million barrels per day in the coming weeks.
