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GulfToday Report

Oil slumped by more than 1% on Friday as Europe faces new lockdown rules and markets are on edge due to the uncertain US election outcome.

West Texas Intermediate (WTI) futures were fell by 52 cents, or 1.3%, at $38.27 a barrel at 07:49 GMT.Brent crude was 48 cent, or 1.2%, lower at $40.45. Both contracts fell more than $1 earlier in the day.

Jeffrey Halley, senior market analyst at OANDA said, COVID-19's rampage across Europe and the US is likely to deliver a hit to consumption.

The European Union's executive commission also slashed, with speculation that the bloc won’t bounce back to pre-virus levels before 2023. 

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Outcome of the vote counted so far is leaning towards Republicans retaining the control of the Senate and Democrats taking up the major seats in the House of Representatives. This could dashed the hope of investors for large stimulus package.

According to Stephen Innes, chief global market strategist, 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.

US inventories of crude oil slumped last week, the fall is linked to the shutting down of production due to the hurricane that swept through the Gulf of Mexico.

Despite analyst being optimistic about stockpile rising by nearly 900,000 barrel, stockpiles fell by 8 million barrels in the week to Oct.30.