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Oil continues to plunge amid rising coronavirus concerns

FXcoins - Oil continues to plunge amid rising coronavirus concerns

Oil futures fell again on Wednesday after a sharp drop in the previous session, as rising Covid-19 cases in some countries undermined hopes for a sustained recovery in global demand.

 

Brent crude fell 25 cents, or 0.6%, to $ 39.53 a barrel by 04:55 GMT after falling more than 5% on Tuesday and dipping below $ 40 a barrel for the first time since June ...

 

US crude fell 28 cents, or 0.8%, to $ 36.48 a barrel, down nearly 8% in the previous session.

 

Both major oil indicators are trading at around three months.

 

The global health crisis continues to escalate, with cases on the rise in India, the United Kingdom, Spain and parts of the United States.

 

The outbreak threatens hopes for a global economic recovery, which could reduce demand for fuel, from aviation gas to diesel, although falling prices could push refinery profits back into positive territory, Eurasia said in a note.

 

“This would be an important step and perhaps a sign to the industry that the cut in oil production and refining has finally achieved its goal of bringing the industry in line with lower demand,” the statement said.

 

A record supply cut by the Organization of the Petroleum Exporting Countries and its allies known as OPEC + has helped prop up prices, but with grim economic data released almost daily, the outlook for oil demand remains bleak.

 

Factory prices in China fell for the seventh straight month in August, albeit at the slowest pace since March, suggesting that industries in the world's second-largest economy continue to recover from the coronavirus-driven downturn.

09 September 2020

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