Oil falls on rising coronavirus cases, strict lockdowns

Oil prices slid on Tuesday as the state of California enforced stricter lockdowns through Christmas and as coronavirus infections continued to rise in the United States and Europe. 

U.S. West Texas Intermediate crude futures dropped 0.4%, or 18 cents, at $45.58 per barrel. Brent crude futures lost 0.5%, or 24 cents, at $48.55 per barrel. Both contracts fell nearly 1% on Monday.

A surge in global coronavirus cases prompted new lockdowns, including stricter restrictions in the state of California and in Germany and South Korea. 

Meanwhile, after last week’s price rally amid vaccine rollout plans and OPEC’s agreement to postpone a planned production increase, experts are awaiting a new U.S. economic package. The stimulus aid is expected to increase jobs and fuel demand.

According to analysts, U.S. crude stocks likely fell last week, while refined product inventories increased.