Oil prices dropped from a nine-month high on Friday, with COVID-19 cases and the negative impact of the US dollar strengthening attempts seen as a threat to short-term fuel demand.
West Texas Intermediate (WTI) crude futures slipped 14 cents or 0.29%, to $48.22 a barrel at 0757 GMT, while Brent crude futures fell 20 cents, or 0.39%, to $51.30.
Both oil contracts had climbed on Thursday on progress in the COVID-19 aid stimulus, strong Asian refinery demand, and optimism about the dollar falling to its lowest in two and a half years.
The strengthening of the US currency on Friday made oil more expensive for buyers with other currencies, and the move away from expensive investment lowered the oil price.
The stimulus agreement and prospects for the vaccine launch were largely digested by market participants, which made the oil price open to retreat when it began to make a profit.
More than 73.65 million people worldwide were reported to be infected with the coronavirus and 1,654,920 died, according to data on Friday. The increase in the number of cases puts strict restrictions on travel, affecting fuel demand and any economic recovery.
Meanwhile, the data showed that the number of Americans who applied for unemployment benefits for the first time last week has unexpectedly increased. This is a clear indication of what a shake the world’s largest economy has been experienced with its recovery struggle from the pandemic recession.
OPEC + demonstrating its readiness and willingness to adapt to emerging market conditions that will retain raw value over the longer term. As the first step towards its goal of increasing the supply by 2 million barrels per day in the new year, it carries out its plan to add 500,000 barrels per day in January. The near-term challenges are expected to contribute to the upward momentum in the future.