Oil prices slip due to fuel demand concerns as Covid-19 cases rise

15 October 2020 (Last Updated October 15th, 2020 11:16)

Oil prices have slipped due to the resurgence in new cases of Covid-19, increasing concerns over fuel demand recovery and economic growth.

Oil prices slip due to fuel demand concerns as Covid-19 cases rise
IEA said that a second wave of Covid-19 infections could further complicate producers’ efforts to balance the oil market. Credit: LEEROY Agency / Pixabay.

Oil prices have slipped due to the resurgence in new cases of Covid-19, increasing concerns over fuel demand recovery and economic growth.

Brent crude futures were down $0.28 or 0.7% to $43.04 a barrel, while US West Texas Intermediate (WTI) futures fell by $0.24 or 0.6%, touching $40.80, Reuters reported.

European nations are re-imposing lockdowns due to the surge in new coronavirus cases.

World’s third-biggest oil user India is on track to overtake the US with respect to the number of Covid-19 infections.

The country is likely to witness a higher number of cases during the coming weeks as it moves towards its ‘main holiday season’.

On 14 October, the International Energy Agency (IEA) said that the second wave of Covid-19 infections could further complicate oil producers’ efforts to balance the already volatile market.

Axi chief global markets strategist Stephen Innes said: “Traders are in hyperventilation mode over the extent, to which governments may have to renew social mobility restrictions to control the coronavirus’s spread.”

A report released by the industry group American Petroleum Institute (API) showed a fall in the US crude, gasoline and distillate inventories in the week that ended on 9 October.

Meanwhile, Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, had 102% compliance with their oil supply cut agreement last month, Reuters reported, citing two OPEC+ sources.