Oil futures collapsed on Monday, seeking to extend last week’s decline, as COVID-19 cases in the United States and Europe continue to climb, alarming demand for crude.
West Texas Intermediate crude for delivery in December CL.1,
the global benchmark, fell 90 cents, or 2.3%, to $ 38.95 a barrel on the New York Mercantile Exchange. The global benchmark, December Brent BRN00,
fell 89 cents, or 2.1%, to $ 40.88 a barrel on ICE Futures Europe.
“The surge in COVID-19 cases raises fears, oil prices are falling. This is how easily the current situation in the oil market can be summed up, as the record number of nearly 500,000 new cases worldwide over consecutive days not only highlights the risks posed by immediate transport restrictions, but also dampens long-term demand expectations, ”Eugen Weinberg, commodities analyst at Commerzbank, said in a note Monday.
Confirmed cases of COVID-19 soared to 43 million globally on Monday, according to data compiled by Johns Hopkins University, while the death toll rose to 1.15 million. Countries in Europe have tightened restrictions on activity in response to the surge in cases, while the number of infections in the United States saw a record daily increase on Friday, surpassing the previous high in July.
Meanwhile, news about the equation’s supply has also been negative, analysts said. The Libyan National Oil Co. at the end of last week lifted the force majeure on the main remaining oil terminals. A blockade by a militia was lifted in September, but not all facilities were back into service.
According to Reuters, the state-owned oil company said Libya’s production would increase to 800,000 barrels per day in two weeks and to 1 million barrels per day in four weeks.