On Thursday, oil prices tumbled as the global demand outlook was still weak due to the rising coronavirus cases and the higher output from the Organization of Petroleum Exporting Countries (OPEC).
Brent crude oil futures nosedived by 3.2% or USD1.37 to settle at USD40.93/barrel after reaching the lowest at USD39.92/barrel. US WTI crude oil futures shrank even deeper by 3.7% or USD1.50 to USD38.72/barrel, after posting a session low of USD37.61/barrel.
Jim Ritterbusch, president of Ritterbusch and Associates, commented, “Today’s trade is sending off some strong bearish vibes given the selloff across the energy complex that is developing despite a significant lift in risk appetite and weakening US dollar.”
The soaring cases of coronavirus have devastated oil prices. In the US alone, the pandemic has infected more than 7.2 million and killed more than 206,000. Meanwhile, Spain’s capital Madrid would proceed with a lockdown in the very near future, and Russia’s capital Moscow ordered employers to only make 70% of employees work.
Increasing oil production from OPEC also dragged down prices. A Reuters survey estimated its output in September jumped by 160,000 bpd from August. Data showed that OPEC members exported 18.2 million bpd in the month, compared to 17.53 million bpd in August.
A Libyan oil source said that the country’s output has soared to 270,000 bpd after the blockade on oil facilities eased. Adding to the burden on prices was Saudi Arabia’s reportedly rising exports last month by 500,000 bpd, returning to levels above 6.25 million bpd.
Earlier in the session, oil prices got some respite on the back of the US talks on the stimulus package worth more than USD1.5 trillion. However, the agreement was still far from reach due to differences over dollars and values.
