Oil futures moved sharply lower Thursday, with prices at their lowest levels since mid-September, as worries about rising cases of COVID-19 worldwide fed expectations for a slowdown in energy demand.
“The oil market can’t shake its demand fear funk even though U.S. oil supply continues to tighten,” said Phil Flynn, senior market analyst at The Price Futures Group. The Energy Information Administration on Wednesday reported an unexpected decline of 2 million barrels in U.S. crude supply. That marked three weekly declines in a row.
“Lingering demand concerns makes the market less concerned about the trend of tightening supply,” said Flynn, in a daily report.
Crude oil investors have closely followed the spread of the disease because it can have a detrimental impact on appetite for oil as economies stall. Europe was implementing or planning to reinstitute new social-distance restrictions as COVID-19 cases climb.
New rules in Spain mean that a majority of the country’s regions will limit public service and retail to 50% capacity, while France may introduce new restrictions on Thursday night. Per person, Spain, France and the Netherlands have the highest rate of new cases over the last seven days of the world’s largest countries, according to data tabulated by Deutsche Bank.
See: Coronavirus update: Global case tally above 34 million with U.S. accounting for a fifth
On top of those possible drags in oil sentiment, supplies are percolating higher. A recent survey by Reuters pointed to increased oil supply from the Organization of the Petroleum Exporting Countries, with output in September up 160,000 barrels per day from August.
Oil prices in September suffered their first monthly decline since April.
West Texas Intermediate crude for November delivery CLX20, -4.82% CL.1, -4.82% dropped $2.34, or 5.8%, to reach $37.88 a barrel on the New York Mercantile Exchange, following a 2.4% gain on Wednesday.
Prices for the U.S. benchmark, based on the front-month contracts, saw monthly fall of 5.6%, but ended 2.4% higher for the quarter, according to Dow Jones Market Data. They had posted gains in each of the last four months.
December Brent crude BZCZ20, -4.16% shed $2.24, or 5.3%, at $40.06 a barrel after trading as low as $39.95 on the ICE Future Europe exchange.
Prices for both WTI and Brent touched their lowest levels since Sept. 14.
Among the petroleum products traded on Nymex, November gasoline RBX20, -3.26% lost 4.6% to $1.1267 a gallon and November heating oil declined by 5% to $1.0944 a gallon.
Investors were also watching developments between U.S. lawmakers over a possible new round of coronavirus stimulus, which could also provide a potential lift to the energy sector, providing funding to out-of-work Americans and troubled businesses.
Natural-gas futures continued to trade lower after the U.S. Energy Information Administration reported Thursday that domestic supplies of natural gas rose by 76 billion cubic feet for the week ended Sept. 25. On average, analysts polled by S&P Global Platts forecast an increase of 78 billion cubic feet.
Read: Natural gas, lumber among best performers as commodities post a second straight quarterly gain
November natural gas NGX20, -2.61% fell by 7.6 cents, or 3%, to $2.451 per million British thermal units.
October 01, 2020 at 07:48PM
https://www.marketwatch.com/story/oil-prices-retreat-amid-fresh-coronavirus-lockdown-fears-11601556523
Oil falls to lowest prices in over 2 weeks - MarketWatch
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