Oil falls more than 1% as surging COVID-19 cases stoke demand fears

TOKYO (Reuters) - Oil prices fell on Monday, extending last week's losses, as a jump in COVID-19 infections in the United States and Europe raised alarms over crude demand, while the prospect of increased supply also hurt sentiment. Brent crude was down by 53 cents, or 1.3%, at $41.24 by 0052 GMT. U.S.

Reuters October 26, 2020 07:05:59 IST
Oil falls more than 1% as surging COVID-19 cases stoke demand fears

COVID-19 cases stoke demand fears" src="https://images.firstpost.com/wp-content/uploads/reuters/10-2020/26/2020-10-26T012020Z_1_LYNXMPEG9P01W_RTROPTP_2_NORWAY-OIL-WAGES.jpg" alt="Oil falls more than 1 as surging COVID19 cases stoke demand fears" width="300" height="225" />

TOKYO (Reuters) - Oil prices fell on Monday, extending last week's losses, as a jump in COVID-19 infections in the United States and Europe raised alarms over crude demand, while the prospect of increased supply also hurt sentiment.

Brent crude was down by 53 cents, or 1.3%, at $41.24 by 0052 GMT. U.S. West Texas Intermediate (WTI) dropped 53 cents, or 1.3%, to $39.32, having fallen more than a dollar shortly after the start of trading.

Brent fell 2.7% last week and WTI dropped 2.5%.

The United States reported its highest number yet of new coronavirus infections in two days through Saturday, while in France new cases hit a record of more than 50,000 on Sunday, underlining the severity of the outbreak.

On the supply side, Libya's National Oil Corp on Friday ended its force majeure on exports from two key ports and said production would reach 1 million barrels per day (bpd) in four weeks, a quicker ramp-up than many analysts had predicted.

OPEC+, a grouping of producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia, is also set to increase output by 2 million bpd in January 2021 after cutting production by a record amount earlier this year.

"A resurgence in COVID-19 cases in Europe and North America has stopped the recovery in demand in its tracks," ANZ Research said in a note.

"If market conditions worsen, (OPEC+) will have no choice but to delay the increase of quotas by a month or two at its meeting on 1 December," ANZ said.

Russian President Vladimir Putin indicated last week he may agree to extending OPEC+ oil production reductions.

In the United States, energy companies increased their rig count by five to take the total to 287 in the week to Oct. 23, the most since May, energy services firm Baker Hughes Co said. The rig count is an indicator of future supply.

Still, investors increased their net long positions in U.S. crude futures and options during the week through Oct. 20, the U.S. Commodity Futures Trading Commision said on Friday.

(Reporting by Aaron Sheldrick; editing by Richard Pullin)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.