Oil Slips As COVID-19 Lockdowns Increase

Oil prices fell on Tuesday, adding to losses from the previous session that came as California tightened its pandemic lockdown through Christmas and coronavirus cases continued to surge in the United States and Europe.

Brent crude futures fell 40 cents, or 0.8%, to $48.39 a barrel at 0455 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 35 cents or 0.8%, to $45.41 a barrel. Both benchmark contracts lost around 1% on Monday.

Globally, a sharp rise in coronavirus cases has led to a string of renewed lockdowns, including strict measures in the U.S. state of California as well as Germany and South Korea. California on Monday required most of the state to close shop and stay at home under a new order which will last at least three weeks.

Government sources in France said the country may have to delay unwinding some lockdown restrictions next week after signs the downward trend in new cases had flattened out after shops were allowed to reopen late last month.

Following last week’s rally in oil prices on the back of vaccine rollout plans and an agreement by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, to hold back supply increases, analysts said they were closely watching U.S. lawmakers’ efforts to approve a new economic stimulus package.

The stimulus will be needed to drive jobs growth, and, in turn, energy demand. The dollar also weighed on commodity prices after rising against a basket of currencies