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Commercial crude oil reserves rose more-than-expected last week in the United States due to the sharp rise in production after the passage of Hurricane Delta, and prices plummeted in a market weighed down by the pandemic.
A barrel of WTI traded in New York for December delivery lost 5.51% to $ 37.39. In London, meanwhile, a barrel of North Sea Brent with delivery in the same month lost 5.05% to 39.12 dollars.
The two benchmark contracts have fallen to their lows since the beginning of October. According to weekly data from the US Energy Information Agency (EIA) released Wednesday, Crude oil reserves stood at 492.4 million barrels (mb) as of 23 October, an increase of 4.3 mb. Analysts had expected a 1.5 MB increase.
At this level, crude oil reserves are 9% above the average for the past five years. This increase is the consequence of a sharp increase in production from 1.2 mb per day (md) to 11.1 mbg, a maximum in five months, following the passage of several hurricanes across the Gulf of Mexico.
COVID AFFECTS PRICES
The report pushed oil prices lower, already depressed by the prospect of weak demand as the coronavirus pandemic advances around the world. “With the advance of covid around the world, the intensification of the US presidential campaign and the absence of a (new) stimulus plan in the US in the near future, markets fear that demand will not increase as fast as expected. . “Summarizes Bart Melek of TD Securities.
“New blocking measures in Europe reignite demand concerns, at a time when we wonder whether OPEC + (OPEC and its allies) will or will not postpone the return to the 2 mbd market early next year, “added Melek.
On the other hand, “Libya’s crude oil supply is increasing faster and higher than expected,” JBC analysts warned.
AFP
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