Oil stumbles with renewed isolation fears

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Economy

Al Ain News Agencies
Oil prices fell below $ 45 Friday, in light of the increase in the number of infections with the Coronavirus globally, which imposed more isolation measures in a number of countries, especially Europe and the United States.

Brent crude fell about 16 cents at the settlement at $ 44.80 a barrel, while US West Texas Intermediate crude fell to $ 42.01, after losing 23 cents.

A crisis has surfaced in the growing supply of oil, in light of fears of declining demand, due to the closure measures associated with the Covid-19 pandemic.

The International Energy Agency and the Organization of the Petroleum Exporting Countries, two of the biggest exporters of forecasts, this week cut their forecasts for oil demand in 2020. OPEC and its allies are raising production this month.

“The widespread question is whether the spread of the Coronavirus will continue to affect the recovery of demand for gasoline and diesel,” said Andrew Lipo of Lipo Oil Associates in Houston.

Prices were supported this week by US government data, which showed that stocks of crude oil, gasoline and distillates decreased last week, as refiners intensified production and improved demand for oil products.

On a weekly basis, Brent rose 0.9% and West Texas Intermediate rose 1.9%.

According to data from Baker Hughes Energy Services, the number of oil and gas rigs operating this week in the United States, an indication of future supplies, fell to an unprecedented low for the fifteenth week in a row.

OPEC and allies including Russia, in what is known as the OPEC + group, have reduced production since May by about 10% of global demand before the pandemic to support the market. The deal implies an increase in production this month as demand recovers.

A committee of OPEC + is due to meet on Wednesday to study the market.





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