But crude prices were still up for the week, as investors watch for signs of whether the Organization of the Petroleum Exporting Countries and allies including Russia – a group known as OPEC+ – will delay easing production cuts.
Meanwhile, Italy recorded its highest daily number of infections on Thursday and cases surged by at least 120,276 in the United States, the second consecutive daily record as the outbreak spreads across the country.
“COVID-19’s rampage across Europe and the US is likely to deliver a hit to consumption,” said Jeffrey Halley, senior market analyst at OANDA.
“With no concrete evidence that OPEC+ is moving to slow or reverse the pace of production increases, the supply/demand imbalance has capped oil’s pre-election rally,” he added.
Vote counting and trends from the US election point to the Republicans retaining control of the Senate, while Democrats are expected to take a slimmer majority in the House of Representatives, dashing hopes for a large stimulus package, another factor weighing on oil.
President Donald Trump claimed late on Thursday he would win the election if “legal” votes were counted, the latest effort to cast doubt on counting now heading for a third day.
“The most critical questions for oil are how quickly a COVID-19 vaccine is widely available, whether a US stimulus deal can be achieved in a fractious and uncertain political environment, and how OPEC will respond to demand concerns,” said Stephen Innes, chief global market strategist at Axi.
OPEC+ is expected to delay bringing back two million barrels per day of supply in January, given the decline in demand from new COVID-19 lockdowns.
Providing some support for the market, US inventories of crude oil plunged last week, although much of the fall was attributed to production being shut down as another hurricane swept through the Gulf of Mexico.
Stockpiles fell by eight million barrels in the week to October 30, against analyst expectations of a rise of nearly 900,000 barrels.