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Oil prices dropped amid growing coronavirus concern

by Bunkerist
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Oil prices fell on Wednesday amid concerns that increased coronavirus cases in Europe and the United States, the world’s largest oil consumer, could hinder economic growth and continue to reduce demand. Oil prices are rather fragile.

The Organization of Petroleum Exporting Countries (OPEC) said in Tuesday’s monthly report that as a result of the economic collapse caused by the coronavirus pandemic, oil demand will increase by 6.54 million barrels per day to 96.84 million barrels in 2021. Meaning that, it is expected to be 80,000 barrels lower than the forecast a month ago.

Brent crude futures for December fell by 12 cents, or 0.3%, to $42.33 a barrel by 0355 GMT while West Texas Intermediate (WTI) crude oil futures were down 11 cents, or 0.3%, to $40.09.

Allied producers, including Russia, known as OPEC and OPEC +, state they would stick to their plans to reduce oil production cuts from January.

On the supply side, U.S. crude oil production in the Gulf of Mexico continued to recover four days after Hurricane Delta landed.

Inventories of distillates likely fell in the fourth week, while U.S. crude inventories fell last week, according to a survey.

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