New York — Oil futures settled near one-month lows Oct. 28 as fundamental outlooks dimmed amid tightened COVID-19 restrictions in Europe and a US crude inventory build.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
NYMEX December WTI settled $2.18 lower at $37.39/b, and ICE December Brent was down $2.08 at $39.12/b.
German Chancellor Angela Merkel announced a four-week shutdown of bars, restaurants and other leisure facilities nationwide beginning Nov. 2, according to media reports. The country has seen 14,964 new COVID-19 cases and 85 deaths from the disease in the last 24 hours, the government said.
French President Emmanuel Macron announced a similar set of new restrictions in an evening address to the nation on Oct. 28, a day after the country reported 523 coronavirus deaths.
In the US, the seven-day moving average of new coronavirus infections climbed to a fresh all-time high 71,532 on Oct. 27, according to data from The COVID Tracking Project.
Bearish outlooks broke crude futures out of their recent trading range, front-month WTI and Brent last settled lower on Oct. 2.
"WTI crude could remain vulnerable if the US follows Europe's lead in bringing back tougher lockdowns," OANDA senior market analyst Edward Moya said in a note.
NYMEX November RBOB settled 6.2 cents lower at $1.0814/gal and November ULSD was down 4.35 cents at $1.1142/gal.
A strengthened US dollar added additional pressure to oil prices. The ICE US Dollar Index climbed to around 93.4 in afternoon trading, up from 92.93 on Oct. 27 and on pace to close at the highest since Oct. 19.
Meanwhile, US commercial crude stocks climbed 4.32 million barrels to 492.43 million barrels in the week ended Oct. 16, Energy Information Administration data showed Oct. 28. The build pushed stockpiles to more than 10% above the five-year average, marking the first time the nationwide supply hang has expanded since the week ended Sept. 4.
The build comes as US crude production rebounded to 11.1 million b/d last week, up 1.2 million b/d from the week prior as Gulf of Mexico output normalized in the wake of Hurricane Delta.
The steep selloff in crude comes even as two-thirds of the US Gulf of Mexico's crude oil volumes were shut in Oct. 28 ahead of Hurricane Zeta, which strengthened into a Category 2 storm just hours before an anticipated landfall near New Orleans.
An estimated 1.23 million b/d of crude production was shut in, reflecting 66.6% of US Gulf output, according to the US Bureau of Safety and Environmental Enforcement.