Oil slumped as a string of renewed lockdown measures in Europe stoked issues concerning the demand outlook whereas the market’s underlying structure shifted to indicated near-term weak spot.
Futures in New York and London fell as a lot as 5 per cent, with the immediate unfold on each flipping into contango. Concerns are re-emerging over the prospects for a speedy rebound in consumption as Europe’s demand recovery is ready to take one other hit with Germany, France and Italy all having widened lockdown measures this month. Meanwhile, coronavirus circumstances are surging in India and threatening the economic system’s recovery from recession.
“Germany is the biggest economy in the Eurozone, and renewed lockdowns there is nothing but bad for demand,” mentioned Bob Yawger, head of the futures division at Mizuho Securities.