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Oil prices have edged down due to rising concerns over the impact on fuel demand as a result of the resurgence in Covid-19 infections.
The price drop is also partly due to concern about the possible resumption of Libyan exports.
Brent crude LCOc1 futures edged lower by $0.04 to reach at $41.90 a barrel while US West Texas Intermediate crude futures were down by $0.08 to settle at $40.23 a barrel, Reuters reported.
Both the Brent and WTI benchmarks are heading towards a monthly decline.
The news agency quoted ANZ Research as stating: “The outlook for oil demand remains challenging as prospects of new mobility restrictions continue to rise.”
Unemployment claims in the US, the world’s biggest economy, unexpectedly rose last week.
This suggested that the US economic recovery is battered and further reducing the fuel demand as the pandemic continues.
Meanwhile, daily cases of Covid-19 infections across many countries are hitting record-highs and new measures are being put in place. This will likely limit fuel demand as a result of travel restrictions.
On 24 September, the Delta Hellas oil tanker started loading a crude cargo from storage tanks at Libya’s Hariga oil terminal, which is one of the three terminals in the country that recently reopened to exports.
However, it is still unclear how quickly the resumption in production could increase volumes.
OANDA senior market analyst Jeffrey Halley said: “Fundamentally, nothing has changed to the supply side of the equation that is weighing on oil prices in the bigger picture.”