Finance

FTSE 100 Live: Oil prices at 8-week low as Europe tightens Covid-19 restrictions


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urope’s latest surge of Covid-19 cases have kept markets on edge amid fears over the economic impact of further restrictions.

Brent crude is today trading at below $79 a barrel for the first time in eight weeks, with threats by President Biden and the leaders of other major oil consuming countries to release strategic reserves also pushing down prices.

The FTSE 100 index fell by more than 0.4% on Friday, with travel-focused stocks particularly impacted by Austria announcing fresh lockdown measures.

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Brent crude oil is below $79 a barrel as Europe’s deteriorating Covid-19 situation continues to reduce the demand outlook for fuel.

As well as the prospect of tighter Covid restrictions, prices have come under pressure after Japan’s prime minister Fumio Kishida said he is considering the release of strategic oil reserves.

His comments at the weekend follow a request by the Biden administration for major oil consuming nations to release some of their stockpiles in a move to curb high prices.

Brent closed last week below $80 a barrel for the first time in seven weeks and was 0.25% cheaper at $78.70 a barrel today. West Texas oil fell sharply overnight by almost 4% to $76.10 a barrel.

Michael Hewson of CMC Markets said: “While the slide in oil prices is a welcome development in terms of concerns over higher inflation, the collateral damage from tighter restrictions won’t do much in terms of alleviating supply chain disruption.

“The one upside to temporary lower demand is it allows the opportunity for inventories to recover.”

The FTSE 100 index, which fell 0.4% on Friday following Austria’s announcement of new lockdown measures, is expected to open 12 points higher at 7,235 today.

The week ahead includes the minutes from the most recent meetings of policymakers at central banks in the US and Europe, while on the corporate front in London there are results from caterer Compass and challenger bank Virgin Money.

US markets will be closed on Thursday for the Thanksgiving holiday.

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