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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 leap 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 more 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 latest coronavirus infections in two days via Saturday, whereas in France new cases hit a file of more than 50,000 on Sunday, underlining the severity of the outbreak.

On the provision facet, Libya’s National Oil Corp on Friday ended its power majeure on exports from two key ports and mentioned 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 12 months.

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

Russian President Vladimir Putin indicated final week he might conform to extending OPEC+ oil manufacturing reductions.

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

Still, buyers elevated their web lengthy positions in US crude futures and choices in the course of the week via Oct. 20, the US Commodity Futures Trading Commision mentioned on Friday.

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