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Oil plummets as new lockdowns raise concerns about fuel demand

by Bunkerist
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Oil prices eased on Thursday as new restrictions to halt the rise in COVID-19 infections dampened the outlook for economic growth and fuel demand.

The data showed last week that US demand for petroleum products helped reduce crude oil inventories, prices reduced previous losses, and distillate stocks have fallen since 2003, as the Delta storm reduced oil production.

Brent LCOc1 futures fell 16 cents, or 0.4%, to settle at $43.16 a barrel, while West Texas Intermediate (WTI) crude CLc1 fell 8 cents, or 0.2%, to settle at $40.96. Earlier, both benchmarks were down more than $1 a barrel.

In Europe, including the UK who imposed stricter COVID-19 restrictions, some countries revitalized curfews and lockdowns to combat the rise in new coronavirus cases.

The coronavirus surge is forcing Europe to re-enforce pandemic restrictions, paralyzing short-term crude oil demand forecasts. This concern seems to delay the decisions to be taken to mitigate (OPEC +) oil production cuts.

OPEC and its allies have reduced production cuts of 9.7 million barrels per day by 2 million barrels a day, and are now implementing it to be 7.7 million barrels a day.

A Joint Technical Committee with representatives of key OPEC + producers such as Saudi Arabia and Russia convened to review compliance with global oil production cuts. According to the numbers, OPEC + made little progress in September in compensating the overproduction in previous months.

Saudi Arabia is being impatient, both due to the mismatch of some members and “low” oil prices.

In the United States, the number of Americans new claims for unemployment benefits rose to a two-month high last week.

It is said that, the US President requires the amount for the COVID-19 incentive to be $ 1.8 trillion and his request was denied.

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