In this news, we discuss the Oil slides over 2% as new lockdowns threaten demand recovery.
NEW YORK (Reuters) – Oil prices slipped more than 2% on Thursday as new restrictions aimed at stemming a spike in COVID-19 infections increased uncertainty over the outlook for economic growth and a resumption of fuel demand.
Brent LCOc1 futures fell $ 1.00, or 2.3%, to $ 42.32 a barrel at 11:13 a.m. EDT (1513 GMT), while US West Texas Intermediate (WTI) crude CLc1 fell. dropped $ 1.04, or 2.5%, to $ 40.00.
The market cut some of its losses after the US Energy Information Administration said energy companies pulled 3.8 million barrels of crude from US inventories last week. [EIA/S]
This is higher than the 2.8 million barrel draft forecast by analysts in a Reuters poll and confirms the larger-than-expected 5.4 million barrels drop seen in industry data released Wednesday night.
“There is no doubt that the hurricane made the draws bigger,” said Phil Flynn, senior analyst at Price Futures Group in Chicago, referring to Hurricane Delta, which hit the US Gulf Coast on the 9th. October.
Some European countries are re-launching curfews and lockdowns in an attempt to contain the rise in new coronavirus cases, with Britain due to impose tighter COVID-19 restrictions on London from midnight on Friday.
“The coronavirus outbreak is forcing Europe to reinstate pandemic restrictions to curb the spread of the virus and it’s … crippling short-term crude demand forecasts,” said Edward Moya, senior market analyst at OANDA in New York, noting that “sluggish demand will force (OPEC +) to delay any easing of cuts in oil production.”
OPEC and its allies, called together OPEC +, are expected to reduce their production by 2 million barrels per day (b / d), against 7.7 million b / d currently, in January.
OPEC + was 102 percent on its agreement to cut oil supply in September, two OPEC + sources told Reuters ahead of a technical committee meeting on Thursday.
The group will ensure that oil prices do not drop sharply again when it meets to define its policy at the end of November, the OPEC secretary general said, adding that demand has recovered. slower than expected.
Major global oil traders Vitol, Trafigura and Gunvor said they saw a slow recovery in demand for oil due to a second wave of coronavirus with oil prices rising to or above $ 50 a barrel only in October of next year.
“The toxic brew of COVID-19 lockdowns, especially in Europe, and the apparent end of any hope of a US stimulus deal ahead of the election is weighing on risk assets,” said Bob Yawger, chief contracting officer at term on energy at Mizuho in New York.
Additional reporting by Ahmad Ghaddar in London, Sonali Paul in Melbourne and Koustav Samanta in Singapore; Editing by Marguerita Choy and Kirsten Donovan
Original © Thomson Reuters