Oil prices fall as lockdowns weigh, market eyes more stimulus

A TORC Oil & Gas pump jack is seen near Granum, Alberta, Canada May 6, 2020. (Reuters)

SULAIMANI (ESTA) — Oil prices dropped on Thursday as strict coronavirus lockdowns paralyzed much of the global economy.

Brent crude was trading down 3 cents at $51.60 a barrel as of 0601 and U.S. West Texas Intermediate (WTI) lost 5 cents to $48.35 a barrel.

“It is kind of year-end quiet but a weaker dollar is helping keep a floor under markets,” said Stephen Innes, chief global market strategist at Axi, according to Reuters.

Brent and WTI have more than doubled from decade-lows seen in April, putting past a year which marked the first negative prices for WTI that shocked investors globally.

A new variant of the virus in the United Kingdom has led to the reimposition of movement restrictions, hitting near-term demand and weighing on prices, while hospitalizations and infections have surged in parts of Europe and Africa.

On the supply front, U.S. energy firms this week added 3 oil and natural gas rigs to the best quarter for boosting the rig count since the second quarter of 2017, according to data from Baker Hughes.

A Jan. 4 meeting of the Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, is set to boost output by 500,000 barrels per day in January.

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