Early on Tuesday, WTI crude prices are falling as weak demand fears resurface in the wake of Europe imposing tighter lockdowns and restrictions amid a sharp spike in cases. At the time of writing, WTI crude oil is trading at around $46.64 per barrel.

Despite the vaccine rollout underway in Britain, London imposed tighter restrictions in the wake of soaring fresh coronavirus cases, which are likely to dent the demand for fuel. In addition, Germany has also announced more restrictions, shutting down stores till January 10, while Italy is also planning to impose tighter measures during the upcoming holiday period.

Weak demand concerns are also weighing on oil markets after OPEC revised its oil demand forecast for 2021 lower by 350k bpd due to the fresh wave of the pandemic. Meanwhile, economists anticipate US gasoline inventories to have increased by 1.6 million barrels in the past week, adding to worries about the latest wave of infections weakening the demand for fuel.

Losses in crude oil, however, remain limited as traders continue to cheer the rollout of the COVID-19 vaccine across Britain, Canada and the US. Markets remain hopeful that the vaccination drive can help contain the spread of the pandemic and help boost recovery in economies and oil demand.