Oil Slips as Surge in Virus Cases Further Clouds Demand Recovery

EghtesadOnline: Oil prices dipped on Monday as rising coronavirus cases upset hopes for a smooth recovery in fuel demand, with the main crude benchmarks on track for their first monthly falls in multiple months after slipping last week.

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29 September 2020

Brent crude fell 37 cents, or 0.9%, to $41.55 a barrel after dropping 2.9% last week. US West Texas Intermediate was at $39.86 a barrel, down 39 cents or 1%, following a 2.1% decline last week, CNBC reported.

Brent is on track to fall for the first month in six while WTI is headed for its first monthly loss since April as the reimposition of mobility curbs in some countries clouds the outlook on fuel demand recovery.

“New Covid-19 case numbers are accelerating in major US states, renewing fears of mobility restrictions challenging the ongoing oil demand recovery in the last quarter,” ANZ analysts said in a note.

Russian Energy Minister Alexander Novak said Monday that the global oil market has been stable for the past few months and the demand-supply balance restored, but warned of the risks of a second wave of viral cases.

More crude is also being exported from OPEC producers Iran and Libya despite efforts by the Organization of the Petroleum Exporting Countries and their allies to limit output.

Last week, US energy firms also added oil and natural gas rigs for a second week in a row, according to Baker Hughes.