Oil prices dip as Covid-19 cases increase in US and Europe

23 October 2020 (Last Updated October 23rd, 2020 17:49)

Oil prices fell as Covid-19 cases surge in the US and Europe, despite Russian President Vladimir Putin indicating that the country is prepared to extend supply cuts to support prices.

Oil prices dip as Covid-19 cases increase in US and Europe
Tourmaline Oil acquired Jupiter Resources and Modern Resources within a few days of each other. Credit: Skeeze from Pixabay.

Oil prices fell as Covid-19 cases surge in the US and Europe, despite Russian President Vladimir Putin indicating that the country is prepared to extend supply cuts to support prices.

Brent crude fell 24 cents to $42.22 a barrel by 0634 GMT while US oil dropped 28 cents to reach at $40.36.

Although Putin said that his country did not see a requirement for major oil-producing economies to change the deal on reducing global oil supply, he did not exclude an extension of oil cuts if market conditions required.

Rice University’s Baker Institute for Public Policy senior fellow in energy and global oil Mark Finley said: “Heading into the weekend what people are watching are two things: disappointing real-time demand data as a new Covid-19 wave flares, and the looming OPEC/non-OPEC production decision at the end of next month.”

The cuts to global production by OPEC+ countries are due to be lifted at the end of the year.

The surging numbers of new Covid-19 infections in Europe and the US are likely to put a cap on prices as there would be more pressure on fuel demand.

Many US states are recording large daily increases in infections, with cooler weather spiralling the cases further.

France extended curfews for two-thirds of its population while Belgium’s foreign minister was taken into intensive care after being infected with Covid-19.