NEW YORK: Oil prices fell on Friday and posted a second consecutive monthly drop as rising COVID-19 cases in Europe and the United States heightened concerns over the outlook for fuel consumption.
Brent crude dropped 19 cents to settle at $37.46 a barrel, after touching a five-month low of $36.64 in the previous session. The front-month Brent contract expired on Friday and the January contract settled down 32 cents.
U.S. West Texas Intermediate (WTI) crude fell 38 cents to settle at $35.79 a barrel, after dipping to its lowest since June on Thursday at $34.92.
WTI fell 11% for the month, while Brent dropped 10%.
Leaders in France and Germany have ordered their countries back into lockdown, as a massive second wave of coronavirus infections threatened to overwhelm Europe before the winter.
The United States also faces a surge of cases, breaking its single-day record for new infections.
“Many nations with high oil consumption across the world are seeing infection levels that they didn’t have even during the first wave,” said Paola Rodriguez-Masiu, Rystad Energy’s senior oil markets analyst. “These infection levels are destined to bite oil demand, as traffic will be curbed to a minimum during the coming lockdowns.”
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, had planned to raise output by 2 million barrels per day (bpd) in January.
However, top producers Saudi Arabia and Russia are in favor of maintaining the group’s current output reduction of about 7.7 million bpd into next year in the face of lockdowns in Europe and rising Libyan oil output.
OPEC+ is scheduled to hold a policy meeting over Nov. 30 and Dec. 1.
“The outcome has the potential to send oil prices $10/bbl in either direction,” PVM analysts said of the meeting.
In the United States, the oil and natural gas rig count rose in October for the third straight month and drillers added the most rigs in a month since May 2018, energy services firm Baker Hughes Co said on Friday.
Money managers cut their net long U.S. crude futures and options positions in the week to Oct. 27 by 36,589 contracts to 287,723, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.