Oil futures lost some ground early Thursday, with attention turning back to the ongoing rise in COVID-19 cases around the world, underlining worries about energy demand as economies slow, while investors are also keeping an eye on the results of the U.S presidential election.
West Texas Intermediate crude for December delivery CL.1, -0.69% fell 33 cents, or 0.8%, to $38.82 a barrel on the New York Mercantile Exchange, while January Brent crude BRN00, -0.43% was down 23 cents, or 0.6%, at $41 a barrel.
Oil jumped Wednesday, joining a global rally for risky assets, as investors cheered a U.S. election outcome that looks on track to produce a split government, with Democratic challenger Joe Biden nearing the threshold for victory over President Donald Trump while the Senate is likely to remain under Republican control.
A sharp fall in U.S. crude inventories added to the positive mood, but analysts said the continued surge in COVID-19 infections remains a negative factor for the market. The U.S. recorded 102,800 new cases on Wednesday, the first time the tally has topped 100,000, according to The Wall Street Journal.
“There is a chance that Joe Biden would be more pro-active on COVID. Biden would be more likely to listen to the science, and do what needs to be done to contain and control the virus,” said Robert Yawger, director of energy at Mizuho Securities, in a note. “If that led to lockdowns, that would be a very negative demand event for crude oil.”
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