Oil Slides With Lockdowns Spreading Ahead of OPEC+ Decision - Bloomberg close

Oil Slides With Lockdowns Spreading Ahead of OPEC+ Decision - Bloomberg

• West Texas Intermediate for May delivery fell $1.39 to settle at $59.16 a barrel, posting the largest daily loss since March 25
• Brent for May settlement slipped 60 cents to $63.54 a barrel ahead of the contract’s expiry later on Wednesday
• Brent for June delivery lost $1.43 to $62.74 a barrel

Oil fell the most in roughly a week after France announced it will start a month-long lockdown, while OPEC+ voiced its concerns about the strength of oil demand ahead of an expected decision this week on output.

Futures in New York fell 2.3% on Wednesday to the lowest in nearly a week, with French President Emmanuel Macron saying the pandemic is more dangerous than it was in the fall in his address to the nation. The deteriorating near-term demand picture in Europe offset a surprise oil supply draw in the U.S. and other bullish signals pointing toward rising demand as more Americans are vaccinated.

“The news out of France is very troubling for the petroleum complex,” said John Kilduff, a partner at Again Capital LLC. “The Covid situation worsening, particularly in Europe, represents a demand hit again, and it’s weighing on prices.”

Meanwhile, an OPEC+ panel meeting ended without a policy recommendation ahead of Thursday’s talks where the producer group will decide on production going forward. The OPEC+ alliance is debating whether to revive part of the 8 million barrels of daily output -- about 8% of global supply -- they’re withholding. OPEC Secretary-General Mohammad Barkindo pointed to the oil market’s recent volatility as “a reminder of the fragility facing economies and oil demand.”