Oil prices fall on lockdown woes, US poll worries
Print Edition
Oil prices fell yesterday on worries that widening coronavirus lockdowns in Europe would weaken fuel demand while concerns remain over potential turbulence resulting from this week’s United States presidential election.
Brent crude was down 80 US cents, or 2.1 percent, at US$37.14 a barrel by 1140 GMT. US West Texas Intermediate fell 93 cents, or 2.6 percent, to US$34.86.
Countries across Europe have reimposed lockdown measures to try to slow COVID-19 infection rates that have accelerated over the past month.
“The number of lockdowns — and the oil demand the countries that imposed them account for — will lead to some demand destruction, depressing balances and putting further strain on the already fragile market,” said Rystad Energy analyst Paola Rodriguez-Masiu.
Global oil trading companies expect further demand destruction, though estimates differ. Vitol sees winter demand at 96 million barrels per day while Trafigura expects demand to drop to 92 million bpd or lower.
A tight race in the lead up to the US election today and accompanying uncertainty also prompted investor caution in global markets.
“The concerns over oil supply and demand fundamentals ... are going to play second fiddle to the US presidential election and to how risk markets will react to the outcome,” said BNP Paribas analyst Harry Tchilinguirian.
Oil pared some losses after Japan’s export orders grew for the first time in two years and China’s factory activity rose to its highest in nearly a decade in October. More manufacturing surveys are expected from the eurozone and the US later in the day.
Sharply rising Libyan oil production also added to price pressures. Libya’s output stands at about 800,000 barrels per day, up more than 100,000 bpd from a few days ago, a Libyan source said.
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