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Oil recorded second monthly drop due to demand concerns

by Bunkerist
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Increasing COVID-19 cases raised concerns about the fuel consumption outlook, as oil fell on Friday, with a second consecutive monthly drop.

Brent crude LCOc1 dropped 19 cents to settle at $37.46 a barrel, after touching a five-month low of $36.64 in the previous session. The front-month Brent contract expired on Friday and the January contract LCOc2 settled down 32 cents.

West Texas Intermediate (WTI) crude fell 38 cents to settle at $35.79 a barrel, after dipping to its lowest since June on Thursday at $34.92.

WTI fell 11% for the month, while Brent dropped 10%.

The leaders of France and Germany have ordered their countries to re-isolate as a second wave of coronavirus infections threatens to damage human health and the economy in Europe before winter.

Also The United States faces a daily record-breaking increase in cases of new infections.

Many countries with high oil consumption around the world are seeing levels of infection that they did not even have in the first wave. At these levels of infection, oil demand will be further reduced as mobility of transport vehicles will be minimized during impending, possible travel restrictions.

Known as OPEC +, allies, including Russia, had planned to increase production by 2 million barrels a day in January. However, the leading producers, Saudi Arabia and Russia, are in favor of maintaining the group’s current output decline of about 7.7 million barrels for the next year in the face of European lockdowns and rising Libyan oil production.

OPEC + is scheduled to hold a policy meeting on 30 November and 1 December.

In a statement Friday, it was said that the number of oil and gas drilling rigs in the US has increased for the third month and that drilling facilities have added the most rigs in a month since May 2018.

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