Oil Prices Tumble On Demand Worries

Oil prices fell more than 2 percent on Monday to extend losses from the previous week, as a record rise in coronavirus cases in the United States and parts of Europe raised worries about crude demand.

The prospect of increased supply, a lack of progress on a U.S. stimulus package and widespread uncertainty over what the U.S. presidential election will portend for markets also kept investors nervous.

Benchmark Brent crude fell 2.4 percent to $41.08 per barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 2.6 percent at $38.80. Brent dropped 2.7 percent last week while WTI gave up 2.5 percent.

U.S. coronavirus infections hit a record for the second day and new coronavirus cases in France hit a record of more than 50,000 on Sunday, underlining the severity of the outbreak.

Spain announced emergency measures including a nationwide curfew, while Italy imposed at least a month of new restrictions across the country to fight rising coronavirus infections.

“The next few months are going to be very tough and some countries are on a dangerous track,” WHO Director-General Tedros Adhanom Ghebreyesus told a news conference on Friday.

On the supply side, Libya’s state-owned National Oil Corp on Friday lifted its force majeure on exports from two key ports, following high-level agreements on a ceasefire in the country.

The company expects that production would reach 1 million barrels per day (bpd) in four weeks, a quicker ramp-up than many analysts had predicted.

OPEC and its allies are also scheduled to increase production by 2 million barrels per day from January, but it remains to be seen whether the group will go ahead and increase output.

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