Oil prices slip due to increasing cases of Covid-19 infections

9 September 2020 (Last Updated September 9th, 2020 10:51)

Oil prices have inched down as Covid-19 cases mount in some countries and had weakened hopes for a steady recovery in global demand.

Oil prices slip due to increasing cases of Covid-19 infections
Both Brent and WTI benchmarks are currently trading at three-month lows. Credit: M1kha via Flickr.

Oil prices have inched down as Covid-19 cases mount in some countries and had weakened hopes for a steady recovery in global demand.

Brent crude LCOc1 fell by $0.25, or 0.6%, to reach at $39.53 a barrel while US West Texas Intermediate (WTI) CLc1 futures were down by $0.28, or 0.8%, to settle at $36.48 a barrel, Reuters reported.

Both Brent and WTI benchmarks are currently trading at three-month lows.

The biggest global health crisis in the century continues to surge with cases rising in India, Spain, the UK, and many states of the US.

The news agency cited Eurasia as saying that the coronavirus (Covid-19) pandemic is threatening global fuel demand recovery hopes and could see a reduction in demand for fuels from aviation gas to diesel.

Eurasia stated: “That would be a major move and potentially a sign for the industry that the crude production and processing capacity reductions have finally met their goal in adjusting the industry in line with lower demand.”

Record supply cuts by the Organization of the Petroleum Exporting Countries (OPEC), and its allies, together known as OPEC+, have supported prices.

However, oil demand outlook remains dim, with gloomy economic figures being reported almost every day.

China’s factory prices fell more slowly in August at the slowest rate since March, suggesting that the recovery of the industries in the country continue from the sharp downturn as a result of the Covid-19 outbreak.