Oil prices fall as fresh European lockdowns dampen demand prospects

• Brent and WTI oil prices were in the red as COVID-19 lockdowns broadened in Europe.
• Germany has ordered restrictions over the Easter holiday to curb coronavirus cases.
• Oil demand prospects were also hurt as the UK seeks to fine people who travel outside of England.

Oil prices dropped sharply Tuesday as widening COVID-19 lockdowns in Europe weighed on expectations of stronger regional demand for the commodity.

Brent oil, the international benchmark, was on course for a second straight loss. Brent has declined by nearly 5% over the past month but has more than doubled over the past 12 months. West Texas Intermediate crude futures fell 4.9% to $58.47 a barrel.

COVID-19 cases have been rising in Europe at the same time the region has been grappling with a stall in vaccinations. Some European countries had temporarily halted the use of AstraZeneca's vaccine developed with Oxford University after reports of blood clots in some patients, but UK and European Union health officials each said the formula was safe.

Higher case counts have spurred Germany to enact lockdown measures over Easter in Europe's largest economy. France has broadened lockdowns in the country, and Italy has issued new restrictions.

Oil prices in recent months have advanced on prospects that vaccinations in Europe would contribute to businesses reopening and subsequently increase demand for oil.

European travel stocks came under pressure Tuesday after the UK government proposed a £5,000 fine ($7,000) on people traveling outside of England without a valid reason.

"With no end in sight to the 'illegal' holiday restriction, it's difficult to be bullish on airlines," said Sophie Griffiths, a market analyst at Oanda covering the UK and European, Middle East, and Africa regions, in a note.