WTI Crude Oil’s Bearish as Second Wave’s Impact on Demand Weighs
Arslan Butt • 1 min read
Early on Tuesday, the bearish sentiment continues to dictate moves in WTI crude oil amid concerns about the continued rise in fresh coronavirus case across several parts of the world even as Libya ramps up production. At the time of writing, WTI crude oil is trading at around $36.86 per barrel.
Traders are worried about how the recent resurgence in infections could once again weaken the demand for oil, with several countries – Italy being the latest, reimposing lockdowns and restrictions to combat the spread of the pandemic. So far, France, Germany, Britain and Portugal have also brought back lockdowns as cases continue to rise as the weather turns cooler.
Even as oil demand remains weak and is likely to suffer further, Libya continues to increase crude production at a rapid pace after several months of blockade. Oil production has resumed at a faster than expected pace, which is outside the purview of the deeper supply cuts that OPEC and its allies currently adhere to.
WTI crude oil, however, received some support after a report that Russian energy minister was in discussion with leading oil companies in the country regarding possibly extending crude production curbs in the wake of the second wave of the pandemic. Saudi Arabia has also alluded to extending supply cuts beyond the end of this year – a point that may be discussed at the next OPEC meeting at the end of this month.