Home / Oil & Energy / Oil & Companies News / Oil falls as demand concerns loom and Europe enters new lockdowns

Oil falls as demand concerns loom and Europe enters new lockdowns

Oil prices fell on Monday as concerns over surging coronavirus cases globally dampened the prospects for demand recovery while China’s third-quarter economic growth was weaker than expected.

Brent crude for December LCOc1 slipped 16 cents, or 0.4%, to $42.77 a barrel by 0856 GMT. U.S. West Texas Intermediate crude for November CLc1 was down 11 cents, or 0.3%, at $40.77. The contract will expire on Tuesday.

Worldwide coronavirus cases crossed 40 million on Monday, according to a Reuters tally.

“Even if the recent record-high new cases of COVID-19 worldwide have not yet caused demand forecasts to be revised further downwards, there is no sign as yet of the hoped-for recovery,” said Commerzbank analyst Eugen Weinberg.

Many European governments are tightening lockdowns to curb the spread of virus.

“This latest swathe of stringent restrictions will inevitably impede economic growth and undermine the fuel demand recovery,” said Stephen Brennock of oil broker PVM.

Meanwhile, China’s oil-buying frenzy earlier this year is expected to slow in the fourth quarter. Chinese refiners have slowed their processing rates in September.

China’s economy expanded by 4.9% in the third quarter from a year earlier, missing analyst expectations of 5.2%, government data showed.

Investors are also focusing on the OPEC+ oil producer group’s Joint Ministerial Monitoring Committee (JMMC) meeting later on Monday.

The committee is expected to discuss the weakening demand outlook as well as increased output from Libya but is unlikely to recommend immediate action, sources told Reuters.

Energy companies in the United States, the world’s biggest oil producer, last week added the most oil and natural gas rigs since January, with crude prices having held around $40 a barrel in recent months.
Source: Reuters (Reporting by Bozorgmehr Sharafedin in London; Additional reporting by Florence Tan in Singapore; Editing by David Goodman)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping