Oil prices dived Thursday on demand fears as more nations go into lockdown to staunch the spread of the coronavirus, while stock prices attempted a modest rebound.

The post Oil prices slide in lockdown-driven rout appeared first on TODAY.

Oil prices dived Thursday on demand fears as more nations go into lockdown to staunch the spread of the coronavirus, while stock prices attempted a modest rebound.

Both main oil contracts fell five percent for part of the day before clawing back some of their losses, extending this week’s meltdown to plumb four-month lows on virus-driven demand fears.

“The new lockdowns have since yesterday caused a carnage in the oil market,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

“Oil demand will lose ground as a result of the new lockdowns… Prices now naturally decline on this grim prospect,” he added.

The drop in oil prices will increase the pain on oil companies.

Exxon Mobil announced Thursday it was eliminating 1,900 US jobs as part of a cost-cutting drive necessitated in part by the impact of Covid-19 on oil prices.

Meanwhile, stocks were spared Wednesday’s bloodbath which saw losses of more than three percentage points in several major markets.

After spending part of the day in the red, European stocks moved higher in the afternoon after the European Central Bank signalled it would bolster its pandemic response in December.

“Traders took that as a cue to buy back into stocks,” said market analyst David Madden at CMC Markets UK.

Frankfurt ended the day 0.3 percent higher while Paris lost its gains going into the closing bell, as did London, which is outside of the eurozone.

The ECB’s pledge step up stimulus sent the euro lower.

“The euro is trading a little softer in the aftermath of the meeting, as traders begin to speculate on whether we’ll see the bazooka in December, or something even more powerful,” said analyst Craig Erlam at online currency trading site Oanda.

– Double-dip recession risks –

European equities were hammered Wednesday as the German and French governments unveiled tighter restrictions to curb soaring Covid-19 infection rates.

The moves followed weeks of exponentially rising new infections across Europe that forced governments to put fresh containment measures in place.

The deadly second wave could potentially spark another painful global recession, as businesses and economies buckle again under the restrictions, analysts warn.

“Risks of a double-dip recession are rising for the global economy,” said Agathe Demarais, global forecasting director at The Economist Intelligence Unit.

“A second wave of the coronavirus pandemic is raging across Europe, prompting several countries, including heavyweights France and Germany, to re-impose stringent measures to contain the outbreak,” she told AFP.

– Record US recovery –

Wall Street pushed higher meanwhile following data that showed the US economy posting the strongest recovery on record as it expanded by an annualised rate of 33.1 percent in the third quarter, according to government data.

However, compared with July-September of 2019, the third quarter contracted by 2.9 percent after falling by 9.0 percent year-on-year in the second quarter, according to the data.

The data are “akin to looking in the rear-view mirror, as the US economy is now slowing and the economic outlook deteriorating amid surging new cases of COVID-19 across almost all US states,” said UniCredit analyst Daniel Vernazza.

– Key figures around 1530 GMT –

London – FTSE 100: DOWN less than 0.1 percent at 5,581.75 points (close)

Frankfurt – DAX 30: UP 0.3 percent at 11,598.07 (close)

Paris – CAC 40: DOWN less than 0.1 percent at 4,569.67 (close)

EURO STOXX 50: DOWN 0.1 percent at 2,960.03

New York – Dow: UP 0.2 percent at 26,576.61

Tokyo – Nikkei 225: DOWN 0.4 percent at 23,331.94 (close)

Hong Kong – Hang Seng: DOWN 0.5 percent at 24,586.60 (close)

Shanghai – Composite: UP 0.1 percent at 3,272.73 (close)

Euro/dollar: DOWN at $1.1661 from $1.1746 at 2100 GMT

Dollar/yen: UP 104.65 yen from 104.32

Pound/dollar: DOWN at $1.2933 from $1.2983

Euro/pound: DOWN at 90.34 pence from 90.47 pence

West Texas Intermediate: DOWN 4.3 percent at $35.78 per barrel

Brent North Sea crude: DOWN 4.6 percent at $37.34.

Get more stories like this on Twitter