LONDON: Global oil prices moved in and out of negative territory on Friday but remained on course for a second monthly fall as rising COVID-19 cases in Europe and the United States heighten concerns over fuel consumption.
Brent crude was down 3 cents at $37.62 a barrel by 1140 GMT after touching a five-month low in the previous session. The December Brent contract expires on Friday and the January contract was trading broadly flat.
U.S. West Texas Intermediate (WTI) crude fell 4 cents to $36.13 after dipping to its lowest since June on Thursday. It is on track for an 11% monthly decline while Brent heads for an 8% drop.
Prices had swung between slightly positive territory and a more than 2% decline during Friday’s session, with the market “anxious” about renewed lockdowns in Europe and the U.S. election next week, a Singapore-based oil trader said.
The U.S. dollar, measured against a basket of currencies, has also strengthened this week, making dollar-denominated oil more expensive for holders of other currencies.
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 favour 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.
Governments across Europe imposed fresh restrictions this week to curb the spread of the coronvirus, with Germany saying its economy will not fully recover before 2022.
While that has reduced mobility and fuel consumption within Europe, demand in the United States is holding up for now, RBC Capital’s Mike Tran said in a note.