Oil prices were down on Thursday over the double whammy of a rise in US crude inventories and renewed coronavirus restrictions in Europe, both of which threaten oil demand and economic recovery.
International benchmark Brent crude was trading at $63.33 per barrel at 0706 GMT for a 1.67% decrease after closing Wednesday at $64.41 a barrel.
American benchmark West Texas Intermediate (WTI) was at $59.96 per barrel at the same time for a 1.99% drop after it ended the previous session at $61.18 a barrel.
Both benchmarks came under demand pressure with the rise in the number of Covid-19 cases in Germany, France, Italy, the UK, Denmark, Greece, the Czech Republic, Spain, Belgium, Portugal, the Netherlands and Ireland, followed by renewed restrictions and lockdowns.
The vaccine campaigns throughout the continent also faced some delays due to uncertainties over vaccine safety after pharmaceutical company AstraZeneca’s vaccine was banned in many European countries over several reports of blood clotting problems.
Signaling a fall in crude demand in the US, the world's largest oil consumer, and further weighing on oil prices, US crude oil inventories rose more-than-expected by 1.9 million barrels to 502.7 million barrels relative to the market expectation of a build of 900,000 barrels.
The rising value of the US dollar also exerted pressure on crude oil prices, which are indexed to the greenback.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, rose 0.07% to 92.59.
Further price declines were limited after Suez Canal tanker traffic was briefly halted after a container ship ran aground in the canal, blocking ten tankers carrying 13 million barrels of crude oil, according to oil analytics firm Vortexa.
By Sibel Morrow