Oil prices resumed their decline on Monday, falling on renewed concerns that European coronavirus lockdowns could slow any recovery in demand for fuel products.

Brent crude was down 24 cents, or 0.4%, at $64.29 a barrel by 0945 GMT. U.S. oil was off by 32 cents, or 0.5%, at $61.10. Both contracts fell by more than 6% last week after making steady gains for months on the back of output cuts and an expected demand recovery.

“The wake-up call was long overdue,” said Stephen Brennock at oil broker PVM.

“While the supply side of the oil coin is supportive thanks to OPEC+ constraints, the same can’t be said on the demand front. Market players have been guilty of living in the future. The demand picture has taken a turn for the worse, largely due to a host of negative short-term signals in Europe.”

Nearly a third of French people entered a month-long lockdown on Saturday while Germany plans to extend its COVID-19 lockdown into a fifth month, according to a draft proposal.

A broad economic recovery remains elusive, but Saudi Aramco Chief Executive Amin Nasser on Sunday said that global oil demand is on track to reach 99 million barrels per day (bpd) by the end of 2021 thanks to ramped-up coronavirus vaccination programmes.

The Organization of the Petroleum Exporting Countries (OPEC)and its allies, together known as OPEC+, have put in place unprecedented production cuts in a pact to balance global markets after demand plunged during the COVID-19 pandemic.

U.S. drillers, meanwhile, are starting to take advantage of the recent spike in prices, adding the most rigs since January in the week ending last Friday.

The total oil and gas rig tally, an early indicator of future production, rose by nine to its highest since April at 411, energy services firm Baker Hughes Co said in its closely followed report on Friday.

The rig count has been rising over the past seven months and is up nearly 70% from a record low of 244 in August. – Reuters