Oil prices dropped 5% to a three-week low on Wednesday as surging coronavirus infections in the United States and Europe is leading to renewed lockdowns, fanning fears that the unsteady economic recovery will deteriorate.
Brent LCOc1 futures fell $2.07, or 5.0%, to $39.13 a barrel by 10:13 a.m. EDT (1413 GMT), while U.S. West Texas Intermediate (WTI) crude CLc1 fell $2.27, or 5.7%, to $37.30.
That was the lowest for Brent since Oct. 2 and the lowest for WTI since Oct. 5.
The United States, Russia, France and other countries have registered record numbers of COVID-19 cases in recent days and European governments have introduced new curbs to try to rein in the fast-growing outbreaks.
“Crude oil is under pressure from the increase in COVID-19 cases, especially in Europe, and a larger than expected API storage build,” said Robert Yawger, director of energy futures at Mizuho in New York.
U.S. oil and gasoline stocks rose last week, industry data from the American Petroleum Institute showed, with crude inventories rising by 4.6 million barrels, well above analyst expectations of a 1.2 million barrel build in a Reuters poll.