U.S. oil drops as pandemic rages while presidential vote counting continues

TOKYO, Nov 6 (Reuters) - U.S. oil fell nearly 1% on Friday
as new lockdowns went into affect in Europe raising questions
over the outlook for demand for crude, while ballots were still
being counted in the U.S. election with its outcome undecided,
keeping markets on edge.
West Texas Intermediate CLc1 was down 32 cents, or 0.8%,
at $38.47 a barrel by 0040 GMT, having declined nearly 1% on
Thursday. Brent was yet to trade after falling 0.7% in the
previous session. The crude contracts are still heading for
their first weekly gain in four.
Italy recorded its highest daily number infections on
Thursday and the United States surpassed 100,000 new cases of
COVID-19 in one day last week, a record.
"The situation is likely to get worse as the weather gets
colder, with the threat of European-style lockdowns looming on
the horizon," said Bob Yawger, director of energy futures at
Mizuho Securities in New York.
The European Union's executive commission also cut its
economic forecast and predicted the bloc won't see a rebound to
pre-virus levels until 2023.
Vote counting and trends from the U.S. election point to the
Republicans retaining control of the Senate, while Democrats are
expected to take a slimmed majority in the House of
Representatives, dashing hopes for a large stimulus package,
another factor weighing on oil.
"A Joe Biden $3 trillion style deal will not happen," Yawger
said.
President Donald Trump, again without evidence, late on
Thursday said he would win if "legal" votes were counted, the
latest effort to cast doubt on counting now heading for a third
day since the Nov. 3 election. Providing some support for the market, U.S. inventories of
crude oil plunged last week, although much of the fall was
attributed to production being shut down as another hurricane
swept through the Gulf of Mexico. EIA/S
Stockpiles fell by 8 million barrels in the week to Oct. 30,
against analyst expectations of a rise of nearly 900,000
barrels.
The Organization of the Petroleum Exporting Countries and
allies including Russia, a group known as OPEC+, are expected to
delay bringing back 2 million barrels per day of supply in
January, given the decline in demand from new COVID-19
lockdowns.