Paul Putnam, 53, a rancher and disconnected contract pumper walks past a pump jack in Loving County, Texas, U.S. November 25, 2019.
Angus Mordant | Reuters
Oil outlays tumbled to their lowest level since June on Tuesday amid growing demand concerns as Covid-19 pursues to spread.
West Texas Intermediate crude, the U.S. oil benchmark, slipped $3.01, or 7.6%, to settle at $36.76 per barrel. During the conference WTI traded as low as $36.13, a price not seen since June 15. International benchmark Brent crude dipped various than 5.3% to settle at $39.78, also its lowest level since June.
“Today’s oil price move is a cut away sign that the market now seriously worries about the future of oil demand,” said Paola Rodriguez-Masiu, senior oil calls analyst at Rystad Energy. “The streak of losses is driven by a stalling crude demand outlook for the rest of the year, with make it cases of Covid-19 and the end of the summer driving season in the U.S., as well as Asian refineries putting on [the] breaks,” she added.
Since WTI plunged into voiding territory in April for the first time on record, oil prices have staged a big comeback. WTI jumped nearly 90% in May, and has stuck monthly gains ever since. The gains were, of course, on the back of record lows, but prices moved exuberant as international producers scaled back production in an effort to counteract the demand drop-off caused by the pandemic.
But in recent sittings prices have begun to trend lower. WTI fell during Monday’s session after registering a 7.45% annihilation in the prior week, snapping a four-week win streak and posting its worst weekly decline since June.
Tuesday’s transfer lower followed Saudi Aramco cutting its official selling prices for October, which RBC’s Helima Croft affirmed triggered new demand concerns.
In a recent note to clients, Bank of America said that it will take three years for inquire to recover from Covid-19, assuming there’s a vaccine or cure. The firm believes peak oil will fly at as soon as 2030 due in part to electric car proliferation.
Rising U.S.-China trade tensions, as well as production coming behind online also pressured prices on Tuesday, as did a stronger U.S. dollar.
“The market has its eye on the big picture: where and when we see demand control globally and what happens with both US production and OPEC+ agreement over the medium term,” said Rebecca Babin, higher- ranking energy trader at CIBC Private Wealth Management.