Oil prices slumped further on Friday, with U.S. WTI crude futures for December falling to $40.80 per barrel, down 0.4 percent, and Brent crude futures for December declining 22 cents per barrel to $42.94 per barrel.
Prices for both benchmarks also declined on Thursday but are expected to post small gains for the week. The declines continued on comments from OPEC Secretary General Mohammed Barkindo commenting that fuel demand looks 'anaemic'. Despite decreasing demand, OPEC+ is considering the possibility to reverse some of its current supply cuts to add up to 2 million more barrels per day into the market. The final policy decision is expected to be taken at the group's upcoming meeting on November 30.
The US dollar index touched a two-week high on Thursday as several European leaders announced new restrictions to respond to recent increases in the number of COVID-19 cases. London entered a tighter lockdown at midnight on Thursday, while France announced a public health emergency on Thursday and imposed a curfew on Paris. The dollar resumed its safe-haven position in recent days as world leaders have been gearing up for a second wave and expecting to cut economic activity as they had done earlier during the pandemic.
The dollar index was trading at 93.81 as of 12:37 p.m. HK/SIN on Friday. The euro was down 0.026 percent against the greenback, trading at $1.17, while the British pound was down 0.155 percent to $1.289. The sterling's decline came not only from COVID-19 concerns but from threats from the EU that Britain must make economic compromises or face trade disruptions in as little as 80 days. The Australian dollar, known for being one of the most risk-sensitive currencies, was down nearly 1 percent on Thursday, and it continued its decline on Friday, falling 0.254 percent against the US dollar to $0.707.
Expectations for a US stimulus had been supporting the global economy, but as the negotiations drag on it becomes less likely that the stimulus will pass before the US's November 3rd election, increasing analysts' concerns that an economic rebound will take quite some time.