Oil falls more than 1% as surging Covid-19 cases stoke demand fears

Oil costs fell on Monday, extending final week’s losses, as a bounce in Covid-19 infections within the United States and Europe raised alarms over crude demand, whereas the prospect of elevated provide additionally damage sentiment.

Brent crude was down by 53 cents, or 1.3%, at $41.24 by 0052 GMT. US West Texas Intermediate (WTI) dropped 53 cents, or 1.3%, to $39.32, having fallen greater than a greenback shortly after the beginning of buying and selling.

Brent fell 2.7% final week and WTI dropped 2.5%.

The United States reported its highest quantity but of recent coronavirus infections in two days by means of Saturday, whereas in France new circumstances hit a file of greater than 50,000 on Sunday, underlining the severity of the outbreak.

On the provision aspect, Libya’s National Oil Corp on Friday ended its pressure majeure on exports from two key ports and stated manufacturing would attain 1 million barrels per day (bpd) in 4 weeks, a faster ramp-up than many analysts had predicted.

OPEC+, a grouping of producers together with the Organization of the Petroleum Exporting Countries (OPEC) and Russia, can also be set to extend output by 2 million bpd in January 2021 after reducing manufacturing by a file quantity earlier this yr.

“A resurgence in COVID-19 cases in Europe and North America has stopped the recovery in demand in its tracks,” ANZ Research stated in a observe.

“If market conditions worsen, (OPEC+) will have no choice but to delay the increase of quotas by a month or two at its meeting on 1 December,” ANZ stated.

Russian President Vladimir Putin indicated final week he could comply with extending OPEC+ oil manufacturing reductions.

In the United States, power firms elevated their rig rely by 5 to take the entire to 287 within the week to Oct. 23, essentially the most since May, power companies agency Baker Hughes Co stated. The rig rely is an indicator of future provide.

Still, traders elevated their internet lengthy positions in US crude futures and choices throughout the week by means of Oct. 20, the US Commodity Futures Trading Commision stated on Friday.