Oil Extends Losses on Renewed Coronavirus Lockdowns
Shafaq news/ Oil prices fell more than 8 % on Thursday, extending the previous day's sharp decline under pressure from signs of a growing global oil supply glut as governments renew restrictions to counter a second wave of the coronavirus.
U.S. West Texas Intermediate (WTI) crude futures were down $1.23, or 3.10%, at $38.39 by 1000 GMT, their lowest since mid-June.
Brent crude futures fell $1.27, or 3.4%, to a seven-week low of $36.12.
Both contracts plunged by more than 5% on Wednesday.
With COVID-19 cases surging across Europe, France will require people to stay at home for all but essential activities from Friday, while Germany will shut bars, restaurants and theatres from Nov. 2 until the end of the month.
"As lockdowns begin to bite on demand concerns across Europe, the near-term outlook for crude starts to deteriorate," said Stephen Innes, chief global market strategist at Axi.
Margaret Yang, DailyFX Strategist said, “Crude oil prices fell 4 days in a row, weighed by virus concerns and a much higher-than-expected rise in US crude stockpiles.”
The Organization of the Petroleum Exporting Countries (OPEC) and its allies will be monitoring the deteriorating demand outlook closely.
OPEC and its allies, together known as OPEC+, plan on tapering production cuts in January 2021 from a current 7.7 million barrels per day (bpd) to about 5.7 million bpd.
OPEC+ is scheduled to meet on Nov. 30 and Dec. 1 to set policy.
Oil had initially rebounded slightly from overnight losses in Asian morning trade on technical support and the prospect of tighter short-term supply as Hurricane Zeta slams Louisiana.
But the hurricane is forecast to weaken by Thursday morning in the United States and the return of U.S. production will add to existing oversupply.
Data from the U.S. Energy Information Administration on Wednesday provided further evidence of the growing glut: U.S. crude stockpiles rose by 4.3 million barrels in the week to Oct. 23, a bigger increase than expected
