WTI Crude Oil Slides Lower as Supply Disruption Fears Ease
WTI crude oil is starting the fresh trading week on a bearish note, continuing to decline since the previous session as oil companies
WTI crude oil is starting the fresh trading week on a bearish note, continuing to decline since the previous session as oil companies in the Gulf of Mexico restarted production after Hurricane Delta even as the workers’ strike in Norway also got called off. At the time of writing, WTI crude oil is trading at around $40.14 per barrel.
Hurricane Delta had created the biggest disruption in US oil production in 15 years but got downgraded to a post-tropical cyclone by Sunday, allowing companies in the region to resume operations. Meanwhile, oil companies in Norway successfully negotiation a wage bargain with labor union officials, serving to end the strike which had threatened to curtail the country’s oil and gas production by nearly 25%.
Over the past week, WTI oil had gained more than 9% as a result of supply concerns due to the hurricane and the strike, but with those factors no longer offering support, oil traders have resumed their focus on weak demand fears. As a result, crude oil prices have started sliding lower once again, with the spotlight returning on the coronavirus pandemic and its impact on the global economy and oil demand.
Going forward, analysts expect oil prices to receive temporary support intermittently from more storms forming in the Gulf of Mexico region as the hurricane season gets underway. However, oil prices are unlikely to register strong gains unless economic activity picks up and the number of coronavirus cases eases.
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