Oil Falls as Corona Cases Threaten to Recover Demand

Oil prices plunged on Thursday, erasing earlier gains in the session, as a new spike in COVID-19 cases around the world reinforced concerns about economic growth and a recovery in fuel demand.

European countries re-impose curfews and general isolation measures in light of the increase in new cases of Corona. India, which is on its way to overtaking the United States, is preparing the largest number of COVID-19 cases in the world, to increase infections in the coming weeks as a major holiday season approaches. India is the third largest consumer of crude in the world.

Brent crude futures were down 28 cents, or 0.7%, to $ 43.04 a barrel by 0724 GMT, while U.S. West Texas Intermediate crude futures were down 24 cents, or 0.6%, to $ 40.80.

The International Energy Agency said today, Wednesday, that a second wave of infections with the Coronavirus may impede producers’ efforts to strike a balance in the market.

Brent rose 0.4% and West Texas crude 0.6%, extending the gains they made in Wednesday’s session, after data showed that US crude stocks fell last week.

The American Petroleum Institute said that stocks of crude, gasoline and distillates declined in the week ending on October 9, according to a report issued after the market closed yesterday.

The US Energy Information Administration is due to release its weekly data on Thursday, a day later than the normal schedule after a public holiday.

Two OPEC + sources told Reuters before a meeting of the group’s technical committee on Thursday to review the situation in the oil market that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the bloc known as OPEC +, recorded a compliance rate of 102% with their agreement to reduce oil supplies in September.