Oil prices slip 3% as Europe widens lockdowns


2/2
© Reuters. FILE PHOTO: A pump jack operates in front of a drilling rig at sunset in an oil field in Midland

2/2

By Florence Tan

SINGAPORE (Reuters) – Oil prices fell more than 3% on Monday on worries a swathe of coronavirus lockdowns across Europe will weaken fuel demand, while traders braced for turbulence during the U.S. presidential election week.

Brent crude () for January was at $36.78 a barrel, down $1.16, or 3.1%, by 0229 GMT, while U.S. West Texas Intermediate () fell $1.24, or 3.5%, to $34.55 a barrel. Brent fell as much as 5.8% and WTI as much as 6% in early trade, hitting their lowest levels since May.

Countries across Europe have reimposed lockdown measures aimed at slowing COVID-19 infection rates which have accelerated in the continent in the past month.

“The lockdown measures announced by UK and by Italy are just adding to the deteriorating European situation,” Michael McCarthy, chief market strategist at CMC Markets in Sydney said.

“A lot of traders are now looking at the U.S. and their rising infection rates and wondering if Europe is providing the model for what will happen in the U.S. in the coming weeks.”

Oil pared some losses after Japan’s export orders grew for the first time in two years, China’s factory activity accelerated at the fastest pace in nearly a decade in October. More manufacturing data is expected from the eurozone and the United States.

Still, concerns about weakening demand and rising supplies from OPEC and the United States caused oil prices to fall for a second straight month in October, with WTI falling 11% and Brent 8.5%.

READ  Aldi is selling pet toys which can be FROZEN to keep your dogs cool

Rising supplies from Libya and Iraq, members of the Organization of the Petroleum Exporting Countries (OPEC) offset production cuts by other members and caused the group’s output to rise for a fourth month in October, a Reuters survey showed.

OPEC and their allies including Russia, a group known as OPEC+, are cutting output by about 7.7 million barrels per day in a pact aimed at supporting prices.

OPEC+ is scheduled to hold a policy meeting over Nov. 30 and Dec. 1.

In the United States, the total oil and rig count rose in October for a third straight month, according to Baker Hughes data.

A tighter race in the lead-up to the U.S. Election Day and potential electoral uncertainty raised investors’ caution in global markets.

“The most immediate concern for markets is that political paralysis will delay or diminish a fiscal response to the deteriorating coronavirus situation,” McCarthy said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

READ  Millions left vulnerable to payment scams as banks fail to sign up for code of conduct





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here