Oil Drops On Europe Lockdowns Demand Recovery Hopes

Oil prices resumed their decline on Monday, falling more than 1% on renewed concerns that European lockdowns may slow an anticipated recovery in demand for fuel products.

Brent crude was down 69 cents, or 1.1%, at $63.84 a barrel by 0755 GMT. U.S. oil was off by $1.03, or 1.7%, at $60.39 a barrel. Both contracts fell by more than 6% last week. Germany’s lockdown extension and the partial lockdown in France continues to weigh on EU consumption sentiment. Germany plans to extend a lockdown to contain COVID-19 infections into a fifth month, according to a draft proposal, after new cases exceeded levels authorities say will cause hospitals to be overstretched.

Confidence in the safety of AstraZeneca’s COVID-19 vaccine has taken a big hit in Spain, Germany, France and Italy as reports of rare blood clots have been linked to it and many countries briefly stopped using it, poll data showed on Monday.

The Organization of the Petroleum Exporting Countries (OPEC)and its allies have put in place unprecedented production cuts in a pact to balance global markets after demand plunged during the COVID-19 pandemic.

The oil and gas drilling rig tally, an early indicator of future production, rose by nine to 411 last week, the highest since April, energy services firm Baker Hughes Co said in its closely followed report on Friday. The supply count has been rising over the past seven months and is up nearly 70% from a record low of 244 in August.