Oil prices fall on fuel demand woes

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    MELBOURNE- Oil prices dropped on Tuesday as concerns over fuel demand in the near term in coronavirus-hit Europe and the United States returned to haunt the market after an overnight surge on progress towards a COVID-19 vaccine.

    US West Texas Intermediate (WTI) crude futures fell 60 cents, or 1.5 percent, to $39.69 a barrel, while Brent crude futures fell 54 cents, or 1.3 percent, to $41.86 a barrel.

    Both benchmark contracts jumped 8 percent on Monday in their biggest daily gains in more than five months after drugmakers Pfizer and BioNTech.F said an experimental COVID-19 treatment was more than 90 percent effective based on initial trial results.

    “A viable vaccine is unequivocally game-changing for oil – a market where half of demand comes from moving people and things around,” JP Morgan said in a note.