Oil prices fall as rising Covid-19 cases create demand concerns

30 September 2020 (Last Updated September 30th, 2020 11:00)

Oil prices have slipped down as rising cases of Covid-19 infections moving into the northern winter spur concerns about fuel demand.

Oil prices fall as rising Covid-19 cases create demand concerns
Brent crude LCOc1 futures edged down by $0.40 to $40.63 a barrel, Reuters reported. Credit: wasi1370 from Pixabay.

Oil prices have slipped down as rising cases of Covid-19 infections moving into the northern winter spur concerns about fuel demand.

Brent crude LCOc1 futures edged lower by $0.40, or 1%, to reach $40.63 a barrel while US West Texas Intermediate (WTI) crude futures were down by $0.32, or 0.8%, to $38.97 a barrel, Reuters reported.

Both Brent and WTI benchmarks fell over 3% on 29 September as the global Covid-19 death toll passed one million.

The news agency quoted Phillip Futures senior commodities manager Avtar Sandu as stating: “The increasing number of Covid-19 cases continues to raise alarm bells on energy demand.”

ING Economics said in a note: “Whilst demand is an issue for the market, the supply side of the equation is not helping either.”

Sarir oilfield in Libya, which produced over 300,000bpd last year, restarted output after eastern forces eased an ‘eight-month blockade’ on energy plants.

On 30 September, the Norwegian market faced a threat to supply, with oil workers organised by the Lederne labour union planning strike after a ‘breakdown’ in salary talks.

Meanwhile, chief executive officers of the world’s major trading firms are forecasting a weak oil demand recovery.

American oil refiner Marathon Petroleum started imposing job cuts, Reuters said, citing people familiar with the matter.

On 29 September, traders said that the Organization of the Petroleum Exporting Countries (OPEC) is not likely to increase output as planned from January next year so as to counter the fall in fuel demand.