U.S. West Texas Intermediate crude oil futures are trading lower on Friday after breaking sharply from their intraday highs earlier in the session. Weighing on prices were concerns that a fresh surge in COVID-19 cases in Europe would threaten to slow the economic recovery. A jump in the U.S. Dollar also weighed on demand forecasts while a potential release of crude reserves by major economies raised concerns over too much supply.
Perhaps contributing to the early volatility is the expiration of the December WTI futures contract and the rollover into the January WTI futures contract.
Fresh Concerns Over European Economic Recovery as Austria Reimposes Full Lockdown
Austria will become the first country in western Europe to reimpose a full coronavirus lockdown this autumn to tackle a new wave of infections, and will require its whole population to get vaccinated as of February, the government said on Friday.
With cold weather setting in across Europe, governments have been forced to consider reimposing unpopular lockdowns against continued COVID-19 contagion. Austria introduced a lockdown for those who are not fully vaccinated on Monday but since then infections have continued to set new records. The Netherlands is now in partial lockdown with bars and restaurants closing at 01:00 GMT.
With new COVID-19 cases expected to spread throughout Europe, crude oil traders are already starting to price in the possibility of demand destruction due to economic…