Oil drops as gain in COVID-19 cases
On Monday, oil prices slipped because of the increasing coronavirus cases that decrease hopes for a smooth rebound on fuel demand, along with the major crude benchmarks on path for their 1st monthly declines in multiple months after previous week’s drop. Brent oil is on path to decline for 1st month in 6 while, West Texas Intermediate is headed for its 1st monthly drop since April because of the recovery of mobility curbs in some nations clouds the overview on fuel demand rebound.
Analysts said that new coronavirus case numbers are increasing in major American states, renewing concerns of mobility limitations challenging the recent oil demand recovery in the last quarter. More crude oil demand is also exported from the producers of OPEC of Iran and Libya despite struggles by the Organization of the Petroleum Exporting Countries and their allies to restrict output.
Previous week, the energy companies of the United States also included oil demand as well as natural gas rigs for a 2nd week in a row as reported recently. Still, the Secretary General of OPEC Mohammad Barkindo told that commercial oil demand inventories in OECD nations are anticipated to stand only above the 5-year average in the first-quarter of 2021, even before dropping below that level for the remaining of the year.
Numerous analysts recently stated that the solo factor that may provide some assistance to the oil industry is the possibility of strike action. According to the present source, in Norway, which is one of the biggest oil producers outside OPEC, strike of workers that may have been carried out on 30th of September is said to be threatening to drop its production by 900,000barrles per day, the Norwegian Oil and Gas Association (NOG) reported the same on Friday.