Brent crude futures for December delivery recorded a decrease of 1.52 dollars, equivalent to 3.9%, to 37.60 dollars a barrel. The more active January contract lost $ 1.48 to $ 38.16. US West Texas Intermediate crude futures fell $ 1.52, or 4.1%, to $ 35.87. And both contracts fell more than 5%, on Wednesday.
Amidst the increasing number of Covid-19 cases in Europe, France imposed the necessity of homes from tomorrow, Friday, except for necessary activities, while Germany will close bars, restaurants and theaters from November 2 until the end of the month.
“As the shutdowns feed concerns about demand across Europe, crude oil outlook for the near term is deteriorating,” said Stephen Ince, chief global market strategist at Axi. The Organization of the Petroleum Exporting Countries (OPEC) and its allies will closely watch the deteriorating demand outlook.
OPEC and its allies, known as the “OPEC +” group, intend to reduce production cuts in January 2021 from the current 7.7 million barrels per day to 5.7 million barrels per day.
Commerzbank said, “It is increasingly unlikely to raise oil production from January … Instead, OPEC and its allies will need further production cuts, given the weak demand outlook.”
OPEC + meets on November 30 and December 1 to decide on production policy.
Sentiment is also affected by the increase in Libyan oil production. The OPEC member expects to reach production to one million barrels per day in the coming weeks, which will be double the levels earlier this month.
In the context, the Norwegian “Equinor” reduced the value of its assets by $ 2.93 billion after reducing its forecast for the price of oil in the long term, today, Thursday, saying that the pandemic and the shift away from fossil fuels will have lasting repercussions on the markets. Calculating the asset reduction, Equinor incurred a net loss of $ 2.12 billion in the third quarter.
The energy giant’s adjusted profit before interest and tax was $ 780 million between July and September, down from $ 2.59 billion in the same period in 2019, and less than the $ 1.03 billion predicted by 24 analysts in a survey by Equinor itself.
Eldar Sayerte, the outgoing CEO, said in a statement: “Our financial results are affected by weak prices as regions around the world continue to be affected by the pandemic.”
The reduction in the value of assets comes after similar decisions by “BP”, “Royal Dutch Shell” and other oil companies that have dropped billions of their book values this year.
Equinor said it expects Brent crude oil to average $ 64 a barrel between 2021 and 2050, higher than the $ 50 BP forecast in June, and also higher than the $ 60 price Shell expects for the long term from 2023.