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UPDATE 4-Oil slides as new lockdown measures threaten demand recovery

Thu, 15th Oct 2020 05:51

* Europe revives lockdowns amid soaring coronavirus cases

* OPEC+ oil cuts compliance in Sept seen at 102% -sources

* U.S. crude stocks drop by 5.4 mln bbls -API
(Updates prices, adds detail)

By Ahmad Ghaddar

LONDON, Oct 15 (Reuters) - Oil prices fell on Thursday as
new restrictions to stem a surge in COVID-19 infections
increased uncertainty over the outlook for economic growth and a
recovery in fuel demand.

Brent crude futures had dropped $1.39, or 3.2% to
$41.93 a barrel by 1247 GMT, while U.S. West Texas Intermediate
(WTI) crude futures were down $1.41, or 3.4%, to $39.63.

Some European countries are reviving curfews and lockdowns
to try to contain the rise in new coronavirus cases, with
Britain expected to impose tougher COVID-19 restrictions on
London from midnight on Friday.

A third of France's population has been placed under nightly
curfew to tackle climbing infections.

India, the world's third biggest oil consumer, is on track
to overtake United States with the world's most COVID-19
infections, and is bracing for a surge of cases in coming weeks
as it heads into its main holiday season.

"If demand weakens noticeably, OPEC+ will have no choice but
to call off its production increase if it does not want to risk
a renewed oversupply and another price slide," Commerzbank said.

OPEC and its allies, together called OPEC+, had 102%
compliance with their agreement to cut oil supply in September,
two OPEC+ sources told Reuters ahead of a technical committee
meeting on Thursday.

The group will ensure oil prices do not plunge steeply
again when it meets to set policy at the end of November, OPEC's
Secretary General said on Thursday, adding that demand has been
recovering more slowly than expected.

OPEC+ is due to taper production cuts by 2 million barrels
per day (bpd), from 7.7 million bpd currently, in January.

The International Energy Agency said on Wednesday that a
second wave of coronavirus infections could complicate efforts
by producers to balance the market.

A fall in U.S. inventories last week limited the fall in
prices, however.

The American Petroleum Institute industry group said U.S.
crude, gasoline and distillate inventories all fell in the week
to Oct. 9.

The U.S. Energy Information Administration is due to release
its weekly data on Thursday.
(Additional reporting by Sonali Paul and Koustav Samanta;
Editing by Jane Merriman, Kirsten Donovan)

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