WTI Crude Oil Back to Trading Bearish – Weak Demand in Focus
Arslan Butt • 1 min read
Bearishness is back in WTI crude oil after it closed the previous session nearly 3% weaker as concerns about oversupply amid weak demand return once again, with the US resuming oil production after Hurricane Delta, Norway getting back to normal levels of production after the workers’ strike and Libya restarting production at its largest oilfield after force majeure was lifted. At the time of writing, WTI crude oil is trading at around $39.43 per barrel.
The lifting of force majeure at the oilfield at Sharara is expected to increase Libya’s oil output to 355k bpd, which could increase the supply of oil by OPEC+ countries even after the leading oil producing nations committed to curtailing supply amid weak demand due to the pandemic. Meanwhile, US oil companies in the Gulf of Mexico are also getting back to work after Hurricane Delta got downgraded to a post tropical cyclone over the weekend.
After successful meditations, workers at Norwegian oil companies have also called off their strike, which had threatened to take down around 25% of the country’s oil and gas output. This is likely to add more oil supply to markets in the coming days even as demand fails to pick up.
Crude oil prices are also trading bearish over a continued increase in the number of coronavirus cases across several countries. This has oil traders worried that governments could reimpose fresh restrictions to contain the spread of infections, which could further hamper economic activity and oil demand.