Oil Drops Below $40 With Demand Outlook Increasingly Shaky
October 1, 2020 EnergyNow Media
By Elizabeth Low and Alex Longley
(Bloomberg) Oil fell below $40 a barrel with a challenged demand outlook and higher supplies from OPEC+.As the coronavirus continues to spread, there are ominous signs for consumption. A 7-day moving average of worldwide commercial flights declined to the lowest since mid-August, according to Flightradar24, a website that tracks flights in real time, while U.K. car usage slumped last week amid new virus restrictions. Europe’s oil refineries are struggling to cope with a diesel glut, limiting their prospects for extra crude buying.
As oil oscillates around $40, there’s also downward price pressure coming from the supply side, with Libyan output being restored and Russian exports expected to increase. The North African country is now pumping around 300,000 barrels a day, up from 80,000 at the start of last month. September data also show higher oil exports from Saudi Arabia and Iraq.
ply,” said Tamas Varga, analyst at PVM Oil Associates. “This upswing in global oil supply comes amid lingering demand concerns.”
West Texas Intermediate for November delivery fell 1.7% to $39.54 a barrel at 8:32 a.m. in New York.
Brent for December settlement fell 1.5% to $41.66
Crude’s slump comes despite more positive sentiment in broader markets. Earlier in the day prices had gained with equities as the prospects of a fresh fiscal-stimulus package grow in the U.S.
As the market has stabilized in recent weeks, so have speculative flows into crude. Eleven of the largest ETFs in the market together withdrew $293 million in September, according to data compiled by Bloomberg. Though that’s a fourth consecutive month of outflows, it’s also the smallest of the four.
Other oil-market news
Exxon Mobil Corp. gave a glimpse Thursday of its third-quarter financial performance that includes a worsening picture at its oil-refining business and further losses for the energy giant’s upstream unit.
Four Singapore-based crude oil traders from BP Plc left the company after the conclusion of internal investigations into their involvement in several disputed deals, said people with knowledge of the situation.
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