Oil prices fell 4% on Monday due to US presidential election and the expansion of coronavirus measures concerns in Europe that would weaken fuel demand.
Brent crude futures LCOc1 for January dropped $1.49, or 3.9%, to $36.45 a barrel by 0745 GMT, while West Texas Intermediate (WTI) futures CLc1 fell $1.58, or 4.4%, to $34.21.
Brent fell as much as 5.8% and WTI as much as 6% in early trade, hitting their lowest levels since May.
Countries in Europe have reintroduced lockdown measures to try to slow down COVID-19 infection rates, which accelerated last month.
Global oil trading companies expect demand to decrease further, although they make different estimates. While Vitol predicts winter demand to be 96 million barrels a day, Trafigura expects demand to fall to 92 million barrels a day or less.
Oil reduced some losses after Japan’s export orders rose for the first time in two years and China’s factory operations hit almost a decade’s high in October. More manufacturing data is expected from the eurozone and the US later in the day.
Weaking demand and concerns about increased supply from OPEC and the United States caused oil prices to lose a second month in October. WTI fell 11% and Brent fell 8.5%.
Excess supply from OPEC members Libya and Iraq compensated for production cuts by other OPEC members, causing the group’s output rise in October for the fourth month.
OPEC + is scheduled to hold a policy meeting on 30 November and 1 December and is expected to delay plans to increase production by 2 million barrels in January.
Postponing supply growth will help secure a large deficit in the first quarter of next year and the rest of 2021.
With the coming of the winter season, it is hoped that the consumption for heating and emerging markets will make up for the blow from lockdowns in Europe.
According to the data, the total number of oil and gas rigs in the United States increased for the third month in a row in October.
Investors are cautious in global markets, with tight competition and election uncertainty ahead of Tuesday’s US elections.