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After parts of Europe went into lockdown again last week, a new wave of lockdowns throughout the world are threatening to tamp down oil demand yet again—and just when things were starting to look up for oil.
On Wednesday, Sweden implemented a partial lockdown shutting down bars and restaurants—for the first time since the pandemic started. For Sweden, who has so far tried to get by with implementing voluntary measures, this is big news.
Across the ocean in New York, Governor Cuomo ordered all bars, restaurants, and gyms to close by 10 p.m. He also capped private gatherings at just 10 people. The changes will go into effect on Friday.
Next door in New Jersey, Governor Phil Murphy put similar measures in place, telling all bars that bar seating would be banned indefinitely, and telling restaurants that they must shut down dining areas at 10 p.m. Outdoor dining will steel be allowed after 10 p.m., but with high temps headed below 60 degrees this weekend, and below 50 degrees next week, the outdoor dining is expected to be sparse.
Oil prices were seemingly undeterred at the lockdown developments, which will have at least some impact on oil demand.
At 2:23 p.m. ET, WTI was holding strong at $41.61, up $1.32 (3.28%) on the day, while Brent crude was up $1.45 (3.42%) on the day at $43.85.
Oil prices rallied earlier in the week after Pfizer announced that it had a 92% success rate in a trial for a Covid-19 vaccine. Prices were bolstered even further when OPEC member Algeria suggested that OPEC+ could deepen the group's production cuts come January.
But the vaccine won't improve oil demand today. Today, we have lockdowns and more lockdowns, which will have an immediate negative effect on transportation fuel in general as more people stay home in the evening hours.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.