On October 19, oil futures decreased while in the previous session, it was trading with gains. The decline was caused by rising covid-19 cases and tighter economic restrictions around the world. Globe stoked fears over slower fuel demand, surpassing upbeat vaccine news.
Brent crude futures decreased by 17 cents, which equals 0.4%, and settled at $44.17 a barrel by 0345 GMT, while in the previous session, it boosted 1.4%$. Furthermore, U.S. West Texas Intermediate crude dropped 0.7%, which equals 29 cents, and settled at 41.53 a barrel, while on October 18, Wednesday, it increased by 1%.
According to chief analyst a Fujitomo Co, Kazuhiko Saito, the spread of Covid-19 infections and new restrictions in the United States and other parts of the world hit market sentiment as it would impact fuel demand. He added that investors are also booking profits from the recent rally before the U.S. Thanksgiving celebration later this month.
On Wednesday, the U.S. death toll from coronavirus surpassed a grim new milestone of 2,50,000 lives lost, as New York City’s public school system called a halt to in-classroom instruction, citing a jump in Covid-19 case rates.
Additionally, daily covid-19 infections in Tokyo and South Korea reached new highs, as New Delhi struggled with increasing cases and Australia reported the highest number of diseases, which forced a statewide lockdown.
Furthermore, worries about the economic damage caused by covid-19 overshadow upbeat news from Pfizer and BioNTech that are seeking the U.S. and European permissions for their coronavirus vaccines next months.
According to a commodity analyst at Rakuten Securities, Satoru Yoshida, weaken global equities amid rising worries over the worsening pandemic also propped fears over reducing consumption and fuel demand.
WTI oil will be traded among $40 -$41 a barrel
Furthermore, on Thursday, Asian shares declined from record highs as tightening coronavirus restrictions in the United States weighed on Wall Street.
Additionally, increasing worries about oversupply, Libya’s National Oil Corporation and France’s Total discussed NOC’s efforts to boost capacity and improve production rates to the highest levels.
Besides, U.S. crude inventories increased 768,000 barrels last week, less than analyst expectations. Additionally, Distillate stockpiles, which include diesel and heating oil, decreased by 5.2 million barrels.
According to Fujitomi’s Saito, WTI will be traded among $40 – $42 a barrel until the OPEC+ meeting later this month.
Remarkably, OPEC+, which includes the Organization of the Petroleum Exporting Countries, Russia, and other producers, is expected to discuss policy at a full ministerial meeting on November 30 and December 1, 2020.
According to some news, members of OPEC+ are trying to increase output in January by 2 million barrels per day.