Oil pared an earlier gain as a resurgent coronavirus looms over the demand outlook.
Futures in London were still 0.8% higher, having earlier rallied with European markets. Brent subsequently pared its gains as the U.K. said its latest round of virus restrictions could last for six months. That follows warnings the U.S. could experience another outbreak cycle.
Crude’s slump has seen volatility jump higher with markets beginning to buckle under a renewed wave of virus cases. As governments mull tighter restrictions to prevent its spread, there’s a fresh risk to oil demand, and industry giants including China’s biggest oil company have said refined products demand could peak as soon as 2025.
“Fundamentals once again look challenged,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S.
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