Oil futures fell on worries about energy demand

As we know, there are new travel bans and lockdowns in Europe and the United States to combat the COVID pandemic. Even though a vaccine rollout has started, oil futures still saw a decline.

France’s border with Britain remained closed to trade and travel. Other European countries are banning travel from the United Kingdom amid reports of a new COVID-19 strain.

Approximately 40 countries in Europe, Asia, South America, and the Middle East have restricted travel from Britain. Additionally, countries, including Australia, have also announced news of a fast-spreading modification of the virus.

According to Louise Dickson, Rystad Energy analyst, the travel restrictions that the new strain has triggered affect some oil demand. However, the news of a final US stimulus agreement is also too significant to brush off.

One of the world’s biggest producers of crude, Russia, favors a 500,000 BPD rise in production by the Organization of the Petroleum Exporting Countries and its allies, in a group known as OPEC+.

According to the report, Russia advocates raising the output for OPEC+ by 500,000 barrels a day in February.

WTI and Brent crude for February delivery fell 2% and 1.6%, respectively

Against that backdrop, West Texas Intermediate crude for February delivery declined by 2%, which equals 95 cents, and touched $47.02 a barrel.

February Brent crude fell by 1.6% or 83 cents. It settled at $50.08 a barrel on ICE Futures Europe, following a 0.8% drop in the previous session.

Additionally, contracts for Brent and WTI are threatening to notch their first weekly slump. After seven weekly increases in a row, since October 30 in the Christmas-shortened week.

January gasoline fell by 1.5%, which equals 2.09 cents, or 1.5%, to settle at $1.3395 a gallon. In the previous session, it shed by after a 2.5% slide on Monday. January heating oil slid 1.58 cents, or 1.1%, to end at $1.4616 a gallon, after a 2.4% fall in the previous session.

For January delivery, natural gas touched $2.7800 per million British thermal units, up 2.8%, or 7.5 cents, on Friday, following a 0.2% increase in the previous session.