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Oil prices fall as Covid in Europe sparks demand concern

By Fitri Wulandari

03:40, 22 November 2021

Austrian flag against the sky and protective tape with the lockdown inscription
Austrian flag against the sky and protective tape with the lockdown inscription - Photo: Shutterstock

Oil prices extended last week’s losses on Monday with Brent futures trading at below $80 level as new flare-up of Covid-19 cases and restrictions in Europe raised doubts about demand.

International benchmark Brent crude oil futures dropped 0.56% to $78.45 per barrel (bbl) on Monday in Asia. US crude oil futures West Texas Intermediate traded 0.37% lower at $75.66/bbl.

“The prospect of lockdowns in Europe hurt sentiment in the oil market,” said analysts at ANZ Research in a note on Monday. “This comes amid the prospect of releases of oil from strategic reserves in China and the US,” the analysts added.

Covid-19 in Europe

Russia’s coronavirus death toll hit record high for a second straight day on Saturday despite the number of new infections declined. Meanwhile, the Czech Republic’s Health Ministry said on Saturday that coronavirus infections rates in the country hit a new record for the second time this week. 

Chancellor Angela Merkel said, on 18 November as reported by Euronews, that Germany will introduce tighter Covid-19 curbs on unvaccinated citizens.

Austria becomes the first European Union country to impose a general lockdown, which starts on Monday, in the face of the Covid-19 resurgence, Euronews reported. The country will also make Covid-19 vaccination compulsory from 1 February 2022. 

Brent crude futures - 22 NovemberBrent crude futures, 22 November 2021 - Credit:

Economic stagnation

Austria’s new restrictions did not bid well for the country’s and eurozone’s economic growth, ING Group said in a note on 19 November.


23.02 Price
-3.350% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee 0.0122%
Overnight fee time 22:00 (UTC)
Spread 0.020


2,004.85 Price
-1.180% 1D Chg, %
Long position overnight fee -0.0198%
Short position overnight fee 0.0116%
Overnight fee time 22:00 (UTC)
Spread 0.50

Oil - Crude

71.41 Price
+2.320% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee -0.0015%
Overnight fee time 22:00 (UTC)
Spread 0.030

Oil - Brent

75.98 Price
+2.030% 1D Chg, %
Long position overnight fee -0.0174%
Short position overnight fee -0.0045%
Overnight fee time 22:00 (UTC)
Spread 0.045

“If history is anything to go by, we can expect further curtailments of liberty in many parts of Europe and that increases the risk of economic stagnation as we enter a new year,” the group said. 

While resurgence of Covid-19 in Europe was clouding demand outlook, ANZ Research noted that high frequency data suggest the market remains tight due to ongoing supply issues.

Tights supply

“The Organization of Petroleum Exporting Countries (OPEC+) has struggled to increase output at the agreed rate over the past two months, as producers such as Nigeria and Oman struggle with operational issues,” the firm’s analysts said.

In a meeting on 4 November, OPEC and its allies, the Saudi and Russia-led group known as OPEC+, decided to maintain planned monthly production increases of 400,000 barrels per day starting in December.

In addition, ANZ Research said, US shale producers have also been reluctant to boost output despite high prices.

Read more: UK gas prices rally upward as oil creeps down

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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