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لندن: Oil prices fell more than five percent on Wednesday due to concerns about the impact of the worsening coronavirus crisis on crude oil demand.
West Texas crude futures for December delivery on the New York Stock Exchange fell by 5.4 percent, to reach $ 37.44 a barrel. Meanwhile, in London, Brent crude from the North Sea oil fields also decreased for the same month, by 4.6 percent, to reach $ 39.32.
“The second wave of Covid-19 has struck, and it is likely that there will be another coming wave, as restrictions limit the movement of people and force companies to close, which has a rapid impact on oil demand,” John Hall, president of Alpha Energy Consulting, told AFP.
He added, “We also have stocks in the United States that are higher than expected in the wake of recent storms, so overall, the oil sector will not be able to recover, not yet.”
The rise in inventories in the United States indicates weak demand in the main crude consuming country, which in turn pushes prices down.
The recent losses of oil and oversupply were reflected in the global stock markets, which witnessed widespread selling.
European leaders are forced to return to imposing strict measures that harm the economy to contain the spread of the virus.
“Prices have decreased with the continued spread of the Covid-19 pandemic, which records high daily injuries in many countries, which led governments to impose strict lockdown measures that reflected a decline in oil demand,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy Research Group.
“The news from Europe also contributed to the price reduction, as France and Germany are expected to announce new restrictions to combat the second wave of Covid-19,” he added.
Concern is also dominating oil traders with the approaching US presidential election on November 3, in which President Donald Trump is vying with the Democratic candidate, Joe Biden, leading in opinion polls.
Hall said, “The oil industry is somewhat afraid of Biden winning, although the current policies must be completed in the short term, but as long as Biden is the leader, the market will maintain its tension.”
He added, “Ambiguity will master the situation until the Corona virus is placed under a certain level of control, and this may take until next year.”