Oil prices plunged on Thursday, as they were pressured by fears that the US economic recovery is slowing with the continuing outbreak of the Corona virus, while a new wave of cases of Covid-19 led to the reimposition of travel restrictions in several countries.
Concern about demand and the economic outlook due to the new increase in Coronavirus infections has pushed the dollar up as investors switched to safer assets, adding to pressure on oil prices. The rising dollar reduces the attractiveness of oil, denominated in the US currency, to global buyers.
US West Texas Intermediate crude futures fell 37 cents, or 0.9%, to $ 39.56 a barrel, while Brent crude futures fell 34 cents, or 0.8%, to $ 41.43 a barrel.
The two benchmarks rose slightly on Wednesday after government data showed that stocks of crude and fuel in the United States fell last week.
Gasoline stocks fell more than expected, dropping by four million barrels, and distillates recorded a sudden drop of 3.4 million barrels.
But demand for fuel in the United States has remained weak as the pandemic restricts travel. Government data show that the average demand for gasoline in four weeks amounted to 8.5 million barrels per day last week, 9% less than its level a year ago.
Prices fell after data showed that business activity slowed in the United States in September, and officials at the Federal Reserve (US Central Bank) hinted at concerns about a stalled recovery and Britain and Germany imposed restrictions to curb new infections with the Corona virus, all factors affecting prospects. Fuel demand.
On the supply side, the market remains concerned about resuming exports from Libya, although it is unclear how quickly volumes can increase.
“Obviously, that will be something that the oil market does not want at the moment,” said Vivek Dahar, a commodities analyst at the Commonwealth Bank.
Meanwhile, the Iraqi Oil Ministry denied, on Thursday, a media report that mentioned statements by Oil Minister Ihsan Abdul-Jabbar regarding an imminent agreement with OPEC + to increase the country’s crude exports.
The state-run Iraqi News Agency quoted Abdul-Jabbar as telling the state-owned daily Al-Sabah that he expects to reach an agreement soon with OPEC + on increasing his country’s crude exports.
“The Minister of Oil did not make this statement and did not meet with the newspaper’s correspondent,” Assem Jihad, a spokesman for the Ministry of Oil, told Reuters, adding, “Iraq is committed to the OPEC Plus agreement and is working with OPEC member producers and outside it to confront the challenges facing global oil markets, including the spread of Covid-19, which Caused to reduce global demand for oil ».
Iraq, the second-largest producer in OPEC, previously failed to fully comply with OPEC + oil production cuts, to pump more than its production targets since the agreement signed for the first time in 2016 between the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia.
The decline in exports resulting from the OPEC + cuts is putting pressure on the financial situation of Iraq and is a challenge to the government, which is facing difficulties in dealing with the repercussions of years of war and widespread corruption. (Agencies)