Oil futures settled a bit lower on Thursday, as rising cases of COVID-19 sparked new lockdowns in Europe, raising worries about further slowdowns in energy demand.
Prices, however, nearly erased the day’s losses, buoyed by U.S. government data showing a bigger-than-expected 3.8 million-barrel weekly decline in domestic crude inventories reported MarketWatch.
November West Texas Intermediate crude fell 8 cents, or 0.2%, to settle at $40.96 a barrel on the New York Mercantile Exchange.
The global benchmark, December Brent crude shed 16 cents, or 0.4%, to $43.16 a barrel on ICE Futures Europe.
“COVID-19 reports will continue to rule the daily volatility,” said James Williams, energy economist at WTRG Economics. “In the longer term, there is a lot of upward pressure building,” as prices are not high enough to “encourage sufficient drilling to offset U.S. production declines,” he said, adding that demand will likely recover faster than U.S. output.